The profile of the last two years of bank provisioning looks like a hill – one that is steeper on one side than the other.
The steep side is the billions of dollars of allowances banks took in expectation of a wave of defaults through the Covid-19 crisis. The shallow side is banks unwinding the vast majority of those provisions and releasing them as the credit crisis persistently fails to arrive.
As Euromoney explained in September, a combination of factors brought us to this surprisingly modest hit to bank stability.
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