Covid loan losses exceed 2019 CCAR projections
CECL accounting likely responsible for discrepancy
Top US banks’ estimated loan losses for Q1 2020 overshot their projections for the 2019 round of the Comprehensive Capital Analysis and Review (CCAR) stress test, Risk Quantum analysis shows.
JP Morgan announced provisions for credit losses (PCLs) of $8.3 billion for Q1 2020, reflecting the deterioration of its loan book due to the coronavirus crisis. Under the most recent Federal Reserve stress tests, the bank estimated it would take $38.6 billion of loan losses over the nine quarter horizon
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