Thanks to reader Justin ...

***************************************

By Tyler Durden

One month ago, after the banks reported Q1 earnings, we showed that the major US money center banks saw their loan loss provisions surge by roughly 4x from year ago levels in response to expected deterioration in their loan books, with JPMorgan jumping the most, or just over 5x, hinting the other banks are likely underprovisioned for the storm that is coming.

With banks set to be hit with tens of billions in charge offs – for which they are trying their best to reserve even if they have no idea just how bad the hit will be – we next looked at what the banks did in the aftermath of the financial crisis. What we found is that most banks reserved total losses anywhere between 4 and 6% of total loans. This time around? So far it is less than 2%, as shown in the chart below.