In 2011, the Federal Reserve also issued guidance to the industry on key risk factors in agricultural lending and supervisory expectations for a financial institution’s risk-management practices.7 This guidance applies in all economic environments, but it is especially important in periods of economic stress, because it reminds bankers that the identification of a troubled borrower does not prohibit a banker from working with the borrower.
Moreover, inflation targeting monetary policy ensures that even those at the fringe of financial inclusion are secured from adverse income shocks that hit them when prices rise unconscionably.