Photo: Mark Lennihan Associated Press
Mainly because of the funds reserved for the doubtful receivables, the earnings of JPMorgan Chase has declined by half during the quarter from April to June.
With tens of millions of Americans without jobs, and many businesses are closed or operating under restrictions due to the coronavirus, three of the largest banks in the United States has set aside nearly $30 billion US in the second quarter to cover loans potentially impaired who were doing very well just a few months earlier.
The quarterly results released Tuesday by JPMorgan Chase, Wells Fargo and Citigroup have perhaps the most wide-ranging overview of the severity of the pandemic on the financial health of consumers and businesses in us. During conference calls with analysts and journalists, the leaders of banks have admitted to have underestimated the duration of the pandemic and its effects on the economy as a whole.
Mainly because of the funds reserved for the doubtful receivables, the earnings of JPMorgan) has declined by half during the quarter from April to June, while that of Citigroup has dropped by about 70 % and that Wells Fargo has announced its first quarterly loss since the financial crisis of 2008.
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In April, many economists and Wall Street analysts argued that the u.s. economy would experience a V-shaped recovery : the closures and controls in the home would result in a massive loss of businesses and jobs, but once reopened, things would quickly return to normal. But this is not what happened.
The epidemic of coronavirus in the United States is now in its fifth month, and the number of infections reached record levels in Florida, Texas and California, forcing state and local authorities to close part of their savings.
The thousands of billions of dollars of economic support granted in April to keep afloat in the Us and companies are now almost exhausted. The employment insurance benefits improved expire at the end of the month unless Congress acts, and at this point, many consumers who have more than 90 days late on the repayment of their debts would be in recovery, if it were not for the programs of grace periods sponsored by the government and the banks.