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“Banks keep bragging they’re so liquid and well-capitalized and profitable, but they’re also asking for all these [regulatory] changes,” said Mayra Rodriguez Valladares, managing principal at New York-based MRV Associates, which trains bank examiners and finance executives. “There’s no guarantee,” she said, that easing up on the regulatory burden will mean a flood of new lending.

“If the Fed does lift the asset cap on Wells Fargo, then the bank should be required to submit weekly data on exactly how many loans it is not only approving but disbursing to individuals and small businesses,” Mayra Rodriguez Valladares, a capital market consultant and trainer who works with banks on risk and management issues, told Banking Dive on Monday.

Bank advisor Mayra Rodriguez Valladares at MRV Associates said JPMorgan and other banks might want to think twice about dividends. “Absolutely every market and macro signal is telling us that there’s rising probabilities of default for individuals and especially for companies,” Rodriguez Valladares said. “Banks need to shore up capital to sustain unexpected losses.”

“It is very possible that the Fed will lift the asset cap on Wells Fargo,” Mayra Rodriguez Valladares, a capital market consultant and trainer who works with banks on risk and management issues, told Banking Dive. “It should not unless Wells Fargo can show that it really has improved internal controls given its record of consumer abuses.” If the regulator decides to lift the cap, the bank should be required to submit weekly data on the exact amount of loans it approves and disburses to individuals and small businesses, she said. “Intense supervision is required of Wells Fargo to make sure that it is indeed fulfilling a critical mission to individuals and companies adversely impacted by COVID-19,” Valladares said.

“Banks are certainly better capitalized than before the financial crisis,” said Mayra Rodriguez Valladares, a former banker who trains financial regulators. “But that’s not saying much. They were terribly undercapitalized before the crisis.” “I’m afraid what we’re facing is worse than the financial crisis,” Valladares said, “because the problems now go far beyond housing.”

According to banking and capital markets consultant Mayra Rodriguez Valladares, it’s important that the banks are “well prepared” and “sufficiently liquid” when corporate borrowers rush to draw on their credit facilities. “That’s where the danger is this time; in the run-up to the [financial] crisis, it was leveraged households, and now it’s leveraged corporations,” Valladares says. “Many of these companies have continued to get more levered… You can expect a cascade of [corporate bond] downgrades.”