COVID-19 Impact on the Banking Industry: Lag Between Recession and Bank Distress [September 10, 2020]   [open pdf - 731KB]

From the Document: "Economic recessions and financial crises can cause distress in the banking industry. Typically, there is a lag between the onset of a recession and the peak of bank industry distress. The economic effects of the Coronavirus Disease 2019 (COVID-19) pandemic could similarly stress the banking industry, perhaps acutely, given the sudden and unprecedented nature of the economic contraction. Even though this contraction is severe, a lag is expected, and certain provisions in the Coronavirus Aid, Relief, and Economic Recovery Act (CARES Act; P.L. 116-136) may lengthen it."