“In the global financial crisis, banks were the problem,” said Mike Mayo, a bank industry analyst at Wells Fargo. “The silver lining from that is that banks are prepared for a situation like this, and they want to be part of the solution this time.”
said customers impacted by the coronavirus could skip the March payment on their Apple Card without incurring extra interest. Banks are anticipating that the requests will only climb as the impact of shutdowns tied to the virus grows.
Banks are in a stronger position now because after the financial crisis, caused by irresponsible lending that led to public bailouts of the industry, regulators imposed rules including higher capital requirements and annual stress tests. The industry has stockpiled $914 billion in capital to help cushion loan losses, a 40% boost in the last decade.
"It feels like 2008-2009 in terms of the market dislocations and the uncertainty of what happens next, but for the banks it's a completely different situation with their capital levels," said David Konrad, an analyst at D.A. Davidson. He added that banks would likely help the Fed smooth out dislocations in funding markets with backup lines of credit.
"I've heard from a lot of people pissed that they pulled their buybacks at the time it makes the most sense to do it," Peabody said. "The government is saying, 'We want you to step up to support households, small businesses and corporations.' But is it prudent to reallocate that capital to a zombie company in the energy patch or in the airline industry?"
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