FT News Briefing Airline aid, banks braced for credit loss, grim IMF outlook
Apr 15, 2020
The US Treasury has struck a deal for a $25 billion airline bailout. Meanwhile, JPMorgan Chase and Wells Fargo are boosting loan-loss provisions, anticipating pandemic-related financial strain. An IMF report warns of enduring scars on the global economy as the crisis could lead to greater corporate bankruptcies. With cash reserves dwindling and heavy reliance on fiscal stimulus, the outlook for advanced economies appears grim.
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Banks Brace for Impact
- JPMorgan Chase and Wells Fargo increased loan-loss provisions by $10 billion.
- This is due to the economic uncertainty caused by the pandemic.
Mortgage Forbearance Rises
- Mortgage forbearance requests are increasing due to the CARES Act.
- JPMorgan Chase reported 4% of its mortgage portfolio requested forbearance.
Credit Line Drawdowns Slow
- Companies initially drew down credit lines to hoard cash during the crisis's onset.
- This activity has slowed as companies feel they have sufficient cash.