Banks are 'able and willing' to bulk up loan loss reserves, because it allows them to mask big gains in trading revenue, Allianz’s Mohamed El-Erian says. “If you’ve made a ton of money on trading, you really don’t want to show massive profits right here.”
The chief economic advisor at Allianz acknowledged on CNBC that banks are certainly adding to their credit reserves in an anticipation of a wave of defaults related to the pandemic. "They expect, the IMF expects, everybody expects, the worst economic hit since the Great Depression."
"But I also think, if you've made a ton of money on trading, you really don't want to show massive profits right here," El-Erian said on "" "You don't want to say, 'Hey look I'm doing OK,'" while millions and millions of Americans have lost their jobs in recent weeks. Major U.S. banks started issuing first-quarter earnings this week, and those reports have shown sharp increases in trading revenues due to the coronavirus-spike in financial market volatility. However, since the banks also increased their loan loss pools, earnings actually showed huge declines from last year's January-to-March period.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Christina Anstead on Co-Parenting With Tarek El Moussa Amid Covid-19In an exclusive interview with Daily Pop's Justin Sylvester, HGTV star Christina El Moussa shares an update on life at home during the coronavirus pandemic. Watch it here!
Read more »
Construction crews back on the job in Spain, but rebuilding work life won't be simpleCoronavirus-devastated Spain takes first step toward opening its economy: factory and construction work
Read more »
Barclays halts new job cuts during coronavirus crisis: memoBarclays has halted new job cuts while the coronavirus crisis is ongoing, the bank said in an internal memo seen by Reuters on Tuesday.
Read more »
Bank of America Profit Falls 45% As It Prepares for Loan DefaultsBank of America Corp. said Wednesday that profit fell 45% in the first quarter and the bank set aside billions of dollars to cover potentially bad loans during the coronavirus crisis.
Read more »
Coronavirus Layoffs: Groupon, Dish Latest To Cut Jobs Amid PandemicThe national crisis, spurred by the spread of coronavirus, has impacted nearly every industry.
Read more »
Coronavirus Layoffs: Groupon, Dish Latest To Cut Jobs Amid PandemicThe latest on coronavirus layoffs: - Groupon will lay off or furlough around 2,800 employees - Satellite TV provider Dish is laying off an undisclosed number of its 16,000 employees by lisettevoytko
Read more »