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Investment Banking

Are banks afraid of Covid-19? Watch how much they set aside for loan losses

The unprecedented nature of the pandemic and the banks’ continuing efforts to help consumers have analysts unsure what to expect for the second quarter

Second-quarter results for the biggest US banks won’t be pretty.

The novel coronavirus has wreaked havoc on the economy—and the banks’ operations. Lending money has become a much riskier proposal, forcing banks to put aside billions of additional dollars in case consumers and businesses stop paying. And early this year, the Federal Reserve cut interest rates, which was meant to shore up the economy but also lowered the margin banks can make on any lending they do.

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