Relief for borrowers or ‘extend and pretend’?

As banks struggle to assist their struggling customers, some are raising concerns that the restructured loans are merely a method to push the pain off just a little bit longer and trade write-downs now for losses later.

Loan restructuring has soared nationally in recent quarters, and is sometimes dubbed “extend-and-pretend,” a term that implies that restructuring only delays the inevitable collapse of failing loans. At the end of the first quarter, almost $65 billion in troubled debt had been restructured at U.S. institutions, up 94 percent compared to the first quarter in 2009. During that same period, noncurrent…