Morgan Stanley: Be prepared for increased provisions and spending

Morgan Stanley said it should be prepared for increased provisions and spending. With most analysts expecting a recession or a significant slowdown this year, banks may include a tougher economic outlook and/or increase the probability of a CECL bearish scenario in the current Expected Credit Loss (CECL) base scenario outlook, analysts said. Analysts also said the latest data showed that credit card delinquency rates are growing at the fastest pace since the financial crisis. Morgan Stanley said higher-than-consensus fee guidance could weigh on bank stocks during the fourth-quarter earnings period.

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