000303669 001__ 303669
000303669 005__ 20210122083108.0
000303669 0247_ $$2doi$$a10.22004/ag.econ.303669
000303669 037__ $$a1539-2020-534
000303669 041__ $$aeng
000303669 084__ $$aQ14
000303669 084__ $$aG21
000303669 245__ $$aCOVID-19 Impacts on Agricultural and Non-Agricultural Banks
000303669 260__ $$c2020-05
000303669 269__ $$a2020-05
000303669 300__ $$a13
000303669 336__ $$aWorking or Discussion Paper
000303669 490__ $$aSP 02 2020
000303669 520__ $$aSummary : The uncertainty of the COVID-19 crisis is exposing community banks to a severe adverse shock that is arguably greater than the 2008 financial crisis. A stress test for the 1,671 agricultural banks and 2,261 non-agricultural banks in the United States is completed to provide an estimate of the potential effect of the COVID-19 crisis on bank financial status for 2000-2024. The stress test applies chargeoff rates derived from banks’ actual chargeoff rates for 2008 through 2012, which includes the recession and recovery following the financial crisis. The chargeoff rates applied to each bank in a local market are taken from the 90th percentile chargeoff rates for all banks in the market. Non-agricultural banks are projected by the simulation to be more adversely impacted than agricultural banks. A greater share of non-agricultural banks are expected to fail and to have lower profitability than the share of agricultural banks. A key assumption of the simulation is that agricultural loan chargeoff rates are less than non-agricultural loan chargeoff rates was the case during the 2008-2012 financial crisis. For this assumption to hold, it is implicitly assumed financial support will be provided to farmers and ranchers and the support when allocated and distributed will offset the negative impact from the COVID-19 shock experienced by farmers and ranchers. Without the support, more agricultural banks would be expected to have financial difficulties and fail. Moreover, if support is not allocated to match the parts of the agricultural sector most negatively impacted by the COVID-19 crisis, regional differences in the impact on agricultural banks are likely to emerge.
000303669 546__ $$aEnglish
000303669 650__ $$aAgricultural Finance
000303669 650__ $$aFinancial Economics
000303669 6531_ $$aAgricultural Bank
000303669 6531_ $$aCommunity Bank
000303669 6531_ $$aCOVID-19 Crisis
000303669 6531_ $$aLoan Chargeoff
000303669 700__ $$aAhrendsen, Bruce L.
000303669 700__ $$aYeager, Timothy J.
000303669 700__ $$aFang, Cao
000303669 8560_ $$flle@umn.edu
000303669 8564_ $$976bb94c5-ef8c-4988-a6a0-8f6236a22842$$s367824$$uhttps://ageconsearch.umn.edu/record/303669/files/Staff%20Paper%202020%20Ahrendsen%20Yeager%20Fang.pdf
000303669 909CO $$ooai:ageconsearch.umn.edu:303669$$pGLOBAL_SET
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000303669 980__ $$a1539