The Effect of the Paycheck Protection Program and Financial Reporting Standards on Bank Risk-Taking

This paper examines the consequences of the paycheck protection program (PPP) for bank risk-taking and whether the shift to the current expected credit loss (CECL) model moderates this effect. We find that the extent of a bank’s PPP participation is associated with relatively greater changes in risk-taking outside of the PPP. We also show that this effect is concentrated in banks that have not early adopted the CECL model and banks with timelier pre-PPP loan loss provisions, suggesting that timelier loan loss recognition constrains risk-taking incentives. Overall, our findings provide insight into the indirect consequences of government stimulus programs administered through banks and the role of accounting in constraining bank risk-taking. This paper was accepted by Suraj Srinivasan, accounting.

Pre-pandemic to early-pandemic changes in risk of household food insecurity among Maryland families with children

Objective: The objective was to examine risk and protective factors associated with pre- to early-pandemic changes in risk of household food insecurity (FI). Design: We re-enrolled families from two statewide studies (2017-2020) in an observational cohort (May-August 2020). Caregivers reported on risk of household FI, demographics, pandemic-related hardships, and participation in safety net programs (e.g. CARES stimulus payment, school meals). Setting: Maryland, United States. Participants: Economically, geographically, and racially/ethnically diverse families with preschool to adolescent-age children. Eligibility included reported receipt or expected receipt of the CARES stimulus payment or a pandemic-related economic hardship (n=496). Results: Prevalence of risk of FI was unchanged (pre-pandemic: 22%, early-pandemic: 25%, p=0.27). Risk of early-pandemic FI was elevated for non-Hispanic Black (aRR=2.1 [95% CI 1.1, 4.0]) and Other families (aRR=2.6 [1.3, 5.4]) and families earning ≤300% federal poverty level. Among pre-pandemic food secure families, decreased income, job loss, and reduced hours were associated with increased early-pandemic FI risk (aRR=2.1 [1.2, 3.6] to 2.5 [1.5, 4.1]); CARES stimulus payment (aRR=0.5 [0.3, 0.9]) and continued school meal participation (aRR=0.2 [0.1, 0.9]) were associated with decreased risk. Among families at risk of FI pre-pandemic, safety net program participation was not associated with early-pandemic FI risk. Conclusions: The CARES stimulus payment and continued school meal participation protected pre-pandemic food secure families from early-pandemic FI risk but did not protect families who were at risk of FI pre-pandemic. Mitigating pre-pandemic FI risk and providing stimulus payments and school meals may support children’s health and reduce disparities in response to pandemics.

Changes in Risk in Medium Business Plating and Paint Manufacturing Plants following the Revision of the Korean Chemical Accident Prevention System

Chemical accidents can occur anywhere. The need for chemical management in Korea was realized following the 2012 Gumi hydrofluoric acid accident in 2012. The Chemicals Control Act was enacted in 2015. This system evaluates the risks (high, medium, low) and consequent safety management at all plants that handle hazardous chemical substances. However, the system was criticized as excessive when most plants were designated high-risk without considering their size. Thus, laboratories and hospitals handling very small quantities were subject to regulation. Accordingly, in 2021 Korea revised the system to include off-site consequence analyses and a Korean-style risk analysis. Plants handling very small quantities, such as laboratories and hospitals, were exempt from regulation. In this study, changes in risk were examined for four medium-sized plating and paint manufacturing plants. Under the previous system, all four factories were judged as high-risk groups. In particular, the paint manufacturing plant A, which has an underground storage tank, received a medium risk like the plating plant C, although the possibility of a chemical accident was lower than that of other plants. However, in the changed system, all plants were changed to the low-risk group. In the Korean-style risk analysis, it is possible to see at a glance what is lacking in the plants, such as cooperation between local residents and local governments and the construction of safety facilities according to the type of accident scenario. The revised system is a reasonable regulation for medium business plants.

COMPERA 2.0: A refined 4-strata risk assessment model for pulmonary arterial hypertension

BackgroundRisk stratification plays an essential role in the management of patients with pulmonary arterial hypertension (PAH). The current European guidelines propose a 3-strata model to categorise risk as low, intermediate, or high, based on the expected 1-year mortality. However, with this model, most patients are categorised as intermediate risk. We investigated a modified approach based on 4 risk categories with intermediate risk subdivided into intermediate-low and intermediate-high risk.MethodsWe analysed data from COMPERA, a European pulmonary hypertension registry, and calculated risk at diagnosis and first follow-up based on functional class (FC), 6 min walking distance (6 MWD) and serum levels of brain natriuretic peptide (BNP) or N-terminal fragment of pro-BNP (NT-proBNP), using refined cut-off values. Survival was assessed with Kaplan-Meier analyses, log-rank testing, and Cox proportional hazards models.ResultsData from 1,655 patients with PAH were analysed. Using the 3-strata model, most patients were classified as intermediate risk (76.0% at baseline and 63.9% at first follow-up). The refined 4-strata risk model yielded a more nuanced separation and predicted long-term survival, especially at follow-up assessment. Changes in risk from baseline to follow-up were observed in 31.1% of the patients with the 3-strata model and in 49.2% with the 4-strata model. These changes, including those between the intermediate-low and intermediate-high strata, were associated with changes in long-term mortality risk.ConclusionsModified risk stratification using a 4-strata model based on refined cut-off levels for FC, 6MWD and BNP/NT-proBNP was more sensitive to prognostically relevant changes in risk than the original 3-strata model.

Risk Spillover: A New Perspective on the Study of Financing Difficulties for SMEs—Evidence from China

Existing studies on the financing difficulties of middle- and small-sized enterprises (SMEs) have neglected the quantitative analysis of SMEs’ risk spillovers to banks. Therefore, taking China as an example, we have analyzed the financing difficulties of SMEs from the perspective of risk spillover. The GARCH time-varying copula-CoVaR model based on the skewed-t distribution was used to measure the risk spillover effects of SMEs on banks. Furthermore, the heterogeneous impacts of risk spillovers on different scale banks were analyzed, including state-owned banks, joint-stock banks, and city commercial banks. The study found that SMEs always have obvious risk spillover effects on banks; it is particularly difficult for SMEs to obtain loans from the largest state-owned banks because in extreme cases, SMEs have the highest risk spillover effects on state-owned banks. The changes in risk spillover effects are attributed to two reasons. One is that the degree of association between SMEs and various banks is different, and the other is that there are varying degrees of risk spillover effects among various banks.

The Long-Term Changes in Dynamic Risk and Protective Factors Over Time in a Nationwide Sample of Dutch Forensic Psychiatric Patients

The long-term changes of dynamic risk and protective factors have rarely been studied in forensic psychiatric patients. We utilized a latent growth curve analysis to investigate trajectories of risk and protective factors over time in all 722 male forensic psychiatric patients who were unconditionally released between 2004 and 2014 from any of 12 Dutch forensic psychiatric centers (FPCs). The study covered the period from juridical observation until unconditional release. Moreover, we investigated whether these trajectories differ between patients depending on their psychiatric diagnosis namely substance use disorders (SUD), psychotic disorders, and cluster B personality disorders (PDs). In addition, we also investigated whether SUD may influence changes in risk and protective factors in a group of psychotic and cluster B PDs patients, respectively. Overall, findings suggest that all changes in dynamic risk and protective factors could be depicted by two phases of patients' stay in the FPCs. Specifically, most changes on dynamic risk and protective factors occurred at the beginning of treatment, that is, from the time of juridical assessment up to the time of unguided leave. Moreover, the moment of unguided leave could be considered the ‘turning point’ in the treatment of offenders. We also found that SUD and psychotic patients changed the most in the first phase of their stay, while cluster B PDs patients changed the most in the second phase. However, SUD did not modify changes in risk and protective factors in psychotic and cluster B PDs patients. These findings may help improve offender treatment and crime prevention strategies.

Risk factor modification reduced incidence of atrial fibrillation in an 18-year prospective cohort study: a time-updated analysis

Background Although atrial fibrillation (AF) is an increasing health burden worldwide, strategies for AF prevention are lacking. This study aimed to identify modifiable risk factors (MRF) for and estimate their impact on AF risk in the midlife general population. Methods We assessed 9,049 participants who were free of prevalent AF at baseline from the Korean Genome and Epidemiology Study. Cox models with time-varying assessment of risk factors were used to identify significant MRF for incident AF. The MRF burden was defined as the proportion of times presented MRF during follow-up, based on the number of visits. Results Over a median follow-up of 13.1 years, 182 (2.01%) participants developed AF. In time-updated multivariable models accounting for changes in risk factors, three MRF including systolic blood pressure (SBP) more than 140 mmHg, obesity with central obesity, and an inactive lifestyle were significantly associated with incident AF. Compared to subjects with three MRF, those with one or no MRF had a decreased risk of AF (hazard ratio [95% CI] for one MRF, 0.483 [0.256–0.914]; and for no MRF, 0.291 [0.145–0.583]). A decreasing MRF burden was associated with reduced AF risk (hazard ratio [95% CI] per 10% decrease in SBP more than 140 mmHg, 0.937 [0.880–0.997]; in obesity with central obesity, 0.942 [0.907–0.978]; in inactivity, 0.926 [0.882–0.973]). Conclusions Maintenance or achievement of optimal MRF control was associated with decreased AF risk, suggesting that minimizing the burden of MRF might help prevent AF.