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Bank CEOs Warn of Unprecedented Economic Slump, Job Losses

  • Lenders expect GDP to be down as much as 40% in second quarter
  • Billions in loan-loss provisions set aside amid economic slump
James Gorman
James GormanPhotographer: Al Drago/Bloomberg
Updated on

Big banks are often seen as a barometer for the health of the U.S. economy. This week, that gauge turned decidedly negative.

Executives at the largest U.S. lenders gave an unflinching assessment of the pain to come from the pandemic-spurred economic slowdown. JPMorgan Chase & Co. said gross domestic product could decline 40% as unemployment surges as high as 20% this quarter, while Bank of America Corp. forecast a slump well into next year. The top five lenders have collectively set aside about $25 billion for loans they expect to sour.