The meltdown in the U.S. sub-prime mortgage market should not lead to systemic problems in the U.S. banking system, BCA Research says.

“Real estate loans and holdings of mortgage securities together account for a record 44% of U.S. banks’ assets. Thus, the sub-prime crisis raises fears of repeat of the early-1990s’ banking crisis, caused by rising bad loans,” BCA notes.

The firm says that it examines the impact of the sub-prime debacle on the financial system and economy in a new special report. “Our analysis suggests that a credit crunch is unlikely, even allowing for a marked rise in loan defaults. The main reason is that banks are in a very strong financial position, unlike the situation 20 years ago,” it concludes. “Banks will face increased pressure, but the odds of system problems are low.”