From The Pragmatic Capitalist:

According to the IMF the problems in the banking sector are far from over. In their latest Global Financial Stability Report they find that the economy is improving, however, the risks to the banking sector remain. They also conclude that any hiccup in the real economy would reverberate thru the banking sector and further intensify the weakness in the broader economy:

The immediate outlook for the financial system has improved markedly since the April 2009 Global Financial Stability Report (GFSR) and extreme tail risks have abated. Financial markets have rebounded, emerging market risks have eased, banks have raised capital, and wholesale funding markets have reopened. Even so, credit channels are still impaired and the economic recovery is likely to be slow.

A key question addressed is whether the financial system can provide sufficient credit to sustain an economic recovery...

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More on banks:

The big banks are in serious trouble

An epic boondoggle gets worse: The FDIC is broke

Scary headline of the week: "You have no clue how bad banks' balance sheets are"