The Covid-19 pandemic has induced a kind of schizophrenia in credit risk models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in the hands of consumers and businesses, the models changed course, leading banks to release reserves back into the income statement. This year, the models have shifted yet again as the stimulus programmes wind down and banks assess the impact on borrowers