Warren queries large banks on their coronavirus planning

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WASHINGTON — Sen. Elizabeth Warren is asking the chief executives of five of the largest U.S. banks for details on how they are managing risks associated with the coronavirus.

In a letter Friday, the Massachusetts Democrat and candidate in the Democratic presidential primary asked the CEOs of Citigroup, JPMorgan Chase, Goldman Sachs, Bank of America and Morgan Stanley a series of questions about their response to the outbreak, warning that it could have an impact on their operations, customers and growth.

“As a globally systemic important bank, your institution and the customers it serves could be impacted either directly through exposures to areas where the virus has spread or indirectly through a change in market conditions caused by disruptions in supply chains, a drop in tourism or travel, or numerous other factors that could cause a slowdown in economic growth,” Warren said in the letter. She is asking the CEOs to respond by March 13.

Warren says in the letter that the banks’ customers could be among businesses that have curbed or shut down their operations because of the virus, making it harder for them to repay their loans. She said those effects may be more pronounced in banks with direct exposure to regions where the coronavirus is most prevalent.

She added that threats from the virus are “particularly disturbing because they come after regulators either have weakened or are attempting to weaken critical safeguards put in place after the 2008 financial crisis."

Warren is asking the CEOs to explain which economic sectors they are monitoring most closely in the midst of the coronavirus outbreak and what level of exposure the banks have to China, South Korea, Japan, Singapore, Thailand, Italy and Iran.

She is also asking the CEOs if they believe the virus will have an impact on revenue and profits or on demand for commercial and industrial loans; if their banks are sufficiently capitalized to cover any potential losses from nonperforming loans; and if the banks' internal risk models include scenarios involving a global pandemic.

This article originally appeared in American Banker.
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Coronavirus Elizabeth Warren Citigroup JPMorgan Chase Goldman Sachs Bank of America Morgan Stanley SIFIs Risk management