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Camera-ready art of "Regional Outlook" (226Kb PDF file - PDF help or hard copy)
Regional Perspectives
A growing imbalance between family incomes and escalating housing prices in the rapidly growing Denver, Boulder, Colorado Springs, and Austin metropolitan statistical areas could pressure affordability and constrain future economic growth.
Insured financial institutions in the Dallas Region have experienced a large relative increase in loan volume and a migration into traditionally higher-risk assets, and are facing the potential for heightened levels of credit risk.
The Region's insured institutions report an allowance for loan and lease losses that has lagged loan growth, particularly among institutions experiencing the most rapid growth rates.
By the Dallas Region Staff
In Focus This Quarter
Emerging Risks in an Aging Economic Expansion--This article focuses on the potential risks of current economic conditions to insured depository institutions. Although the current conditions may appear to be ideal, some imbalances are emerging: rising energy prices, tight labor markets, a less robust stock market, a large trade deficit and strong U.S. dollar, rising household debt burdens, increased corporate leverage and rising potential default risk, and, in some metropolitan areas, overheated housing and commercial real estate markets. At the same time, aggregate risk within the banking industry appears to have risen, as evidenced by softening profitability, growing reliance on noncore funding, heightened levels of interest rate risk, and increasing concentrations in traditionally higher-risk loan categories. A confluence of these trends could heighten the vulnerability of some insured institutions.
By the Division of Insurance Staff
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