Managing Concentrations of Credit


Commercial real estate lending continues as a business model focus for many banks in the Region. While some banks fall under enhanced procedures outlined in 2006 regulatory guidance, many banks have concentrations below those levels. In either case, concentration management is an important element of overall bank safety and soundness. Of course, examinations at concentrated banks include an in depth review of risk management practices in this area. We will discuss regulatory guidelines for banks with concentrations in commercial real estate. The presentation will highlight stress testing examples.