Three of the world’s largest banks will report quarterly earnings next week. Many anticipate that JPMorgan Chase, Citigroup and Merrill Lynch will add further writedowns to add to the $400 billion seen since the collapse of the subprime mortgage market.

The latest round of losses has been attributed to construction loans made by banks to home builders.  From Bloomberg…

“According to the Federal Deposit Insurance Corp., delinquent loans accounted for $45.4 billion of the $631.8 billion in construction loans outstanding at the end of the first quarter. When banks announce second-quarter results in coming weeks, they are expected to report sharp increases in loans that builders can’t repay. Banks also are facing intensifying pressure from federal and state regulators to deal with the problem loans on their books.”