Bad day for US banking

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Bank of america yesterday showed that America's banking system is not yet out of the woods, slumping to a $1bn (£613m) third-quarter loss.

The bank was reporting just a day after Goldman Sachs generated fresh controversy after it said it made $3.2bn, with staff likely to pocket huge bonuses as a result.

Bank of America, which owns Merrill Lynch, was dragged down by rising losses from commercial and consumer loans.

While investment banking revenues helped to cushion the blow, the company took permanent losses on $9.6bn of bad debt which included mortgages, home equity loans, credit cards and loans tied to commercial real estate.