Q1 2021 Update: QE Forever Will Kill US Banks
In this issue of The Institutional Risk Analyst, we present five key relationships that describe the progress of US depository institutions since March of last year. The good news is that the dip in earnings and asset quality is far less than the 2008 crisis, suggesting that the economic pain affecting millions of Americans due to COVID is not hitting US banks. The bad news is that the Cares Act and state debt payment moratoria are concealing the true credit cost of COVID – for now. And ugly is the state of bank asset returns as we approach year one of QE 5.
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