Impacts of COVID-19 on Banking

9 Pages Posted: 9 Jul 2020

See all articles by Nancy Seelye

Nancy Seelye

Indiana Wesleyan University

Paul Ziegler

University of Mary Hardin-Baylor

Date Written: June 30, 2020

Abstract

COVID-19 has had major impacts for banking, with the United States government making various efforts to shore up the financial system. These have included temporary and permanent rule changes, easing Capital requirements in an effort to spur lending and maintain bank solvency. Using publicly available data on bank holdings, we constructed tests for the changes in lending and allocation for pending loan loss. Our study finds that there has been a significant increase in loan loss reserves, yet the ratio of these reserves to total lending is not significant. This work will be extended with 2020-Q2 data when it becomes available.

Keywords: COVID-19, Bank Failure, Loan Loss Reserve

JEL Classification: G21

Suggested Citation

Seelye, Nancy and Ziegler, Paul, Impacts of COVID-19 on Banking (June 30, 2020). Available at SSRN: https://ssrn.com/abstract=3645556 or http://dx.doi.org/10.2139/ssrn.3645556

Nancy Seelye

Indiana Wesleyan University ( email )

1900 West 50th St
Marion, IN 469539393
United States

Paul Ziegler (Contact Author)

University of Mary Hardin-Baylor ( email )

PO Box 8014
Belton, TX 76513
United States

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