Would More Rural Bank Access to Nonlocal Funds Provide Public Benefits?

Restructuring of U.S. banking markets has raised concerns that insufficient access to loanable funds will limit economic growth in some rural areas. Access to nonlocal funds can provide public benefits through enhanced competition and efficiency, but subsidized access to nonlocal funds can create economic distortions. Because most rural areas are served by few lenders, public benefits may be limited if additional access does not encourage new competition. Unsubsidized market mechanisms could address the liquidity, risk management, and competitive challenges that some small rural banks may face. At the same time, market mechanisms can promote efficiency-enhancing use of nonlocal funding and limit distortions.


Issue Date:
1997
Publication Type:
Report
Record Identifier:
http://ageconsearch.umn.edu/record/33669
PURL Identifier:
http://purl.umn.edu/33669
Total Pages:
4
Series Statement:
Agriculture Information Bulletin No. 724-10; Issues in Agricultural and Rural Finance




 Record created 2017-04-01, last modified 2018-01-22

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)