How Would Wells Fargo Fare if the Economy Doesn't Recover in 2021?
The economy looks like it's poised for a big recovery in 2021 given where we stand right now with vaccines for the coronavirus. But if 2020 has taught us anything, it's to be prepared for the unexpected. So, if the outlook takes a turn for the worse and doesn't recover in 2021, it's important to know and understand the potential downside.
Given how closely a large bank like Wells Fargo (NYSE: WFC) is linked to the economy, let's take a look at what might happen if the economy doesn't recover in 2021, but actually gets worse.
The Federal Reserve recently released the results from its second round of bank stress testing this year. Stress testing is an exercise the Fed conducts every year on the largest banks in the U.S. to ensure the safety and soundness of the banking system. The goal is to make sure banks are well capitalized in a difficult economic scenario, so they can absorb unexpected loan losses and continue to lend to families and individuals.
Source Fool.com
