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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

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Regional Outlook

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 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

A Publication of the Division of Insurance

Regional Outlook Information

Last Updated 7/27/1999

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