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How much lower could they get? Mr. Feroli estimates that $337 billion of $2.25 trillion in total Subprime and Alt-a mortgage originations are directly held by the banking system as whole loans, and a like amount as mortgage backed securities. Only $16.6 billion in loan loss provisions had already been taken as of the third quarter; based on J.P. Morgan’s estimate of higher-than-normal delinquencies, Mr. Feroli estimates $54 billion will ultimately be written off. That would ultimately shave capital ratios by 0.45 percentage points, putting them near the low of the late 1990s. Other factors could further erode ratios, such as increased writeoffs of other types of loans, or more asset growth as banks fund unanticipated loan commitments.