Divisive Debt Maneuvers; Bank Stress Returns
The Credit Edge by Bloomberg Intelligence
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The Credit Profile of US Card Issues in a Recession
All the card issues have reserved, assuming that unemployment will peak at 5%. That's what our in-house Bloomberg view is. Even if unemployment goes above 5%, we know that the Federal Reserve last year, stress tested all these card issues at 10% peak unemployment. So banks have time to add more provisions to their reserves. And on top of that, they have ample capital to absorb any unexpected losses. I don't think it's a big issue for credit card issues now.
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