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Camera-ready art of "Regional Outlook" (758Kb PDF file - PDF help or hard copy)
In Focus This Quarter
Y2K - Preventing the Year
2000 (Y2K) computer problem is becoming ever more costly as the
time and resources left to do so disappear. Equally costly,
according to some estimates, will be the litigation that follows in
the problem's wake. A failure to address Y2K exposures immediately
and successfully may amount to a gamble backed by the value of the
bank franchise and the officers and directors who run it. By
Gary Ternullo
Trends
in Commercial Real Estate Loan Pricing and
Underwriting - An abundant supply of financing
is placing pressure on commercial real estate loan pricing and
underwriting standards. Underwriting standards are being
increasingly influenced by the rapid growth in commercial
mortgage-backed securities and real estate investment trusts. While
many within the industry believe that broader public funding of
commercial real estate projects will lead to greater market
transparency and improved underwriting discipline, there are a
number of unique risk considerations related to the rapid growth
and continuing development of these alternative funding sources.
By Steven Burton
Total
Return: A Useful Tool for Monitoring Investment Portfolio
Risk - The Federal Financial Institutions
Examination Council is rescinding the 1991 policy that required
"high-risk" testing for mortgage derivative products and
has released for comment a policy encouraging risk management
across all types of instruments on an investment portfolio basis.
Total return, a concept that includes fluctuations in market value,
is a useful tool for measuring the performance of an investment
portfolio and providing information about market risk at the
portfolio level. By Allen Puwalski
Regular Features
Regional Economy - The San
Francisco Region continues to lead the nation in job growth...the
diverse economies of Arizona, California, Oregon, Utah, and
Washington have been propelled by the national economic
expansion...states dependent on natural resources have lagged
recently...fast-growing Nevada's heavy dependence on gaming,
tourism, and construction warrants close monitoring. By Gary
C. Zimmerman
Regional Banking - Banks
report improved asset quality throughout most of the Region...but
many banks have reduced the level of reserves set aside for future
loan losses and increased their concentrations in traditionally
riskier lending categories...faced with declining levels of core
deposits, some institutions are shifting to more potentially
volatile funding sources. By Catherine I. Phillips-Olsen,
Roger Stephens
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