This Is Not a Normal Recession': Banks Ready for Wave of LOAN Defaults
$28 billion to cover losses
The largest U.S. banks signaled that the worst of the coronavirus recession is yet to come, opting to stow away tens of billions of dollars to prepare for an expected wave of loan losses.
JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. said Tuesday they took large hits to their second-quarter profits to collectively stockpile $28 billion to cover losses as consumers and businesses start to default on their loans.
The provisions amount to a sharp increase above what they put away in the first three months of the year, reflecting a shift in their assumptions about the length and severity of the pandemic's economic toll. JPMorgan, the largest U.S. bank by assets
They said it put aside extra to prepare for an unemployment rate that remains at double digits well into next year and a slower recovery in gross domestic product than the bank's economists assumed three months ago.
"This is not a normal recession," said James Dimon, JPMorgan's chief executive. "The recessionary part of this you're going to see down the road."
They are telling you this is not over (no matter how the county tries to open up) and really it is just getting started