Banks and default risk globally. In brief:

*for those who keep insisting that CANADA is the strongest economy with the strongest banking system, I say, you have no idea what you are talking about!
Canadian banks suffer from increasing credit-card losses
Four of the largest banks in Canada boosted the amount of cash they set aside for credit-card losses by more than 50% in the first quarter, and bank executives said the costs might continue to rise this year. "If there's another shoe to drop, credit cards are going to be it," said John Kinsey of Caldwell Securities in Toronto. "It's probably going to be the Achilles heel this year for the banks." While credit-card issuers are reining in offers and lowering credit limits, delinquencies and losses are growing alongside unemployment and bankruptcies, according to Moody's Investors Service. Bloomberg (10 Mar.)

Report: Moody's to list firms at highest risk of default
Moody's is expected to publish Tuesday its first monthly installment of "The Bottom Rung," a report highlighting the U.S. companies most likely to default on their debt, The Wall Street Journal reported. The list includes prominent names including Unisys and Kodak, according to the newspaper. Reuters (10 Mar.)

Credit markets show fresh indications of trouble
Increasing concerns about the future of U.S. automakers and losses at financial institutions and General Electric are resulting in a grim mood among investors. "So far, most of the pain of the problems at financial institutions is being taken by shareholders and taxpayers, but there are real concerns that the problems will be so large that the pain will shift to holders of bonds and other securities," said Brian Yelvington, a strategist at CreditSights. Financial Times (09 Mar.)

Iceland nationalizes last of 4 largest banks
Straumur-Burdaras has been fighting nationalization for months, after Iceland's other major banks -- Landsbanki, Glitnir and Kaupthing -- succumbed to government takeovers in October. On Monday, Straumur lost the battle and was nationalized. "In spite of its strong capital position and the support of funding banks, Straumur believes its liquidity position is no longer strong enough to sustain activities," the bank said in a statement. Financial Times (09 Mar.) , The Guardian (London) (09 Mar.)