A new study released today by the Missouri Bankers Association found that the state and local economies would suffer significant losses if banks were to halt agriculture and commercial lending efforts. Loans in these areas accounted for 25 percent of investment spending in the state, with banks lending $10.8 billion between 2012 and 2014.
The study found that if banks were to stop making these loans, it would translate to a loss of $170.2 billion in real GDP and 130,000 lost jobs in the state over the course of 25 years (2015-2040). The impact would also contribute to a $6.5 billion loss in revenue for state government, leading to the downsizing of state-funded initiatives and infrastructure projects.
In related news, at the end of 2015, the Nebraska Bankers Association released a study of the negative effects of government-subsidized credit unions and the Farm Credit System. It found that the expansion of both the credit unions and the GSE since the financial crisis has been a cause of bank consolidations occurring throughout the state, and has created an unlevel playing field for banks.
Both studies were funded by grants from the independent 501(c)(4) organization set up by ABA’s bank leadership and supported by individuals across the banking industry. A total of nine state associations were awarded grants to examine the economic impact of the financial industry.
