|Camera-ready art of "Regional Outlook" (245Kb PDF file - PDF help or hard copy)
In Focus This Quarter
Economic Conditions and Emerging Risks in Banking--This article provides an overview of economic conditions and banking industry trends, with a primary focus on potential risks to insured depository institutions.
Economic Developments--Low interest rates, dormant inflation, and rising stock markets have all contributed to a generally positive near-term outlook for the U.S. economy.
Trends Affecting Banking Lines of Business--Although credit conditions appear strong, risks exist in the major banking lines of business.
Indicators of Industry Performance--Weaknesses appear to be developing for banks with certain types of exposures, and the dispersion in performance among insured institutions is increasing.
By the Analysis Branch Staff
Economic and Banking Conditions--The San Francisco Region's economy continues to outperform that of the nation despite a marked slowdown in the growth of high-tech manufacturing employment…The Region's slowdown in high-tech manufacturing can be directly attributed to the Asian crisis and overcapacity in several key technology markets…Several states and metropolitan statistical areas, because of their dependence on exports to Asia and the tendency of high-tech companies to "cluster" in certain areas, are more at risk to the slowdown…Community banks in metropolitan areas with high-tech clusters tend to have higher construction and commercial real estate loan exposures than community banks elsewhere in the Region and the nation.
By the San Francisco Region Staff