quarter loan growth would have been negative, absent the ppp loans. as origination fees and interest income are generally recognized over the life of these loans or when they are forgiven, ppp loans will continue to push up bank earnings in the next several quarters. the origination fees earned by community banks this year will mitigate the impact of provisions for credit losses, and in turn, may support further lending by these banks. - 13 despite improvement in these areas, the operating environment remains challenging. the average net interest margin at community banks tightened during the second quarter, and it is likely that margins will remain under pressure given the low interest rate environment. but community banks have historically performed well even when interest margins were under pressure, and they entered into the pandemic in sound financial condition. so what do we take away from this review of bank numbers and performance? in all, i expect community banks will face challenges during what could be a slow return to a full economic recovery, but i also expect that this sector is well prepared to deal with these challenges and will continue to perform the vital role it has played during the response to the pandemic. my hope is that at next year ’ s conference we will have additional data and research that paint a fuller picture of the role community banks played in our nation ’ s response to and recovery from covid - 19, and that we have gained further insights into the role of all community banks, including mdis and cdfis, in ensuring access by all to credit and financial services. community banks rise to the challenge michelle w. bowman member board of governors of the federal reserve system st. louis, missouri september 30, 2020 $ thousands figure 1 : average paycheck protection program ( ppp ) loan size by bank asset size range community banks all other banks bank size < $ 250 million $ 250 - $ 500 million $ 500 million - $ 1 billion $ 1 - $ 5 billion $ 5 - $ 10 billion $ 10 - $ 25 billion $ 25 - $ 50 billion $ 50 - $ 100 billion > $ 100 billion # of ppp lenders 1, 775 source : call report. commercial banks, state savings banks, and thrifts as of june, 2020. figure 2 : small business loans by bank asset size range $ billions 1, 000 + 40 % bank size < $ 1 billion $ 1 - $ 10 billion $ 10 - $ 100 billion > $ 100 billion source : call report. commercial banks, state savings banks

cost ( cpix ) inflation peaked at 13, 6 per cent in august 2008 and declined to 10, 3 per cent by december. with the publication in february 2009 of the reweighted and rebased inflation measure, headline consumer price index ( cpi ) inflation for all urban areas was adopted as the new inflation target measure, with the target range remaining at 3 to 6 per cent. cpi measured 8, 1 per cent in january, but increased to 8, 6 per cent in february and has been declining gradually since then. by july, cpi inflation had declined to 6, 7 per cent. however, the pace of decline has been constrained by substantial increases in some administered prices, particularly electricity prices, and persistently high food price inflation. as a result of the global turmoil, the outlook for inflation was subject to greater risk and uncertainty than usual, and this complicated monetary policy decision - making. furthermore, the assessment of risks changed significantly in the course of the year in line with the reversal in the trends of a number of factors impacting on inflation. the international oil price had been one of the main sources of upside risk to the inflation outlook during 2008. however, in response to the global downturn, the price of north sea brent crude oil declined from levels of around us $ 146 per barrel in august 2008 to around us $ 34 in december. domestic petrol prices followed suit and declined from r10, 70 per litre in july 2008 to r6, 01 per litre in january 2009. however, as global growth prospects improved, the oil price has recently increased to around us $ 70 per barrel. nevertheless, as a result of exchange rate developments, the domestic petrol price is still lower than the levels that prevailed in 2008 and has contributed to downward pressure on inflation during the year to date. the behaviour of the rand exchange rate during the past year has reflected the volatile global environment. in the early stage of the unfolding crisis, the rand came under pressure, along with the currencies of most other emerging - market economies. in november the rand had depreciated to around r11, 85 against the us dollar, and at the december meeting of the monetary policy committee ( mpc ), the exchange rate was identified as the single biggest upside risk to the inflation outlook. however, as risk aversion abated, the rand recovered somewhat over the subsequent months and the risk to the inflation outlook from this source was reduced significantly. the rand has recently been at levels close to