When will the write-downs end? Analysts are feverishly at work on loan-loss models in hopes of finding out. Accrued Interest came up with a nifty shorthand for gauging loss reserves—plugging the details of loan exposures from big American banks’ latest quarterly results into the losses forecast by category by the Federal Reserve in its spring “stress test”. These forecasted losses are then compared with the write-downs and provisions already taken. “The Fed’s guess is as good as any, and the exercise should be illustrative of how close we are to the end of loan loss provisioning” the blog notes.

The chart compares the loan-loss coverage of Wells Fargo (green bars, representing write-downs and provisions) versus the upper and lower bounds for loss estimates for the Fed’s “baseline” (blue bars) and “adverse” scenarios (red bars). Under all but the most sanguine scenarios, more capital must be set aside to cushion against future losses. The same holds true for Bank of America and JPMorgan, with details in the full post.