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Supervisory Insights

Fall 2019 Vol. 16, Issue 1 - Table of Contents

Last Updated: March 23, 2023

Supervisory Insights - Fall 2019 - PDF

Letter from the Director


Commercial Real Estate Loan Concentration Risk Management

This article provides an update on the extent of commercial real estate (CRE) lending exposure in the banking industry as a whole. The article also provides CRE loan risk management and governance trends observed at FDIC-supervised insured depository institutions (IDIs) with concentrations in CRE. These institutions represent over three-quarters of all IDIs with concentrations in CRE and 61 percent of all assets of IDIs with concentrations in CRE. The article discusses broad supervisory findings and does not establish new requirements or new supervisory guidance. Rather, it provides insights into current industry risk management practices and governance, based on examiners’ views.

Leveraged Lending: Evolution, Growth and Heightened Risk

Leveraged lending provides credit to commercial businesses with higher levels of debt and also helps companies obtain funding for transactions involving leveraged buyouts (LBOs), mergers and acquisitions (M&A), business recapitalizations, and business expansions. Many commercial businesses successfully utilize and repay these loans; however, high debt levels coupled with lower levels of liquidity may reduce businesses’ flexibility to respond to changes in economic conditions. The recent period of economic expansion combined with low interest rates provided companies with the opportunity to increase their debt levels over the past decade. As a result, more businesses sought, and received, leveraged loans.

Regular Features

Regulatory and Supervisory Roundup

This feature provides an overview of recently released regulations and other items of interest.

Supervisory Insights

Supervisory Insights is published by the Division of Supervision and Consumer Protection of the Federal Deposit Insurance Corporation to promote sound principles and best practices for bank supervision.

Jelena McWilliams
Chairman, FDIC

Doreen R. Eberley
Director, Division of Risk Management Supervision

Journal Executive Board

Division of Risk Management Supervision
Rae-Ann Miller, Associate Director and Executive Editor
James C. Watkins, Senior Deputy Director
Martin D. Henning, Deputy Director
John F. Vogel, Deputy Director

Division of Depositor and Consumer Protection
Jonathan N. Miller, Deputy Director

Regional Directors
John P. Conneely. Chicago Region
Michael J. Dean. Atlanta Region
Kristie K. Elmquist, Dallas Region
Frank R. Hughes, New York Region
James D. LaPierre, Kansas City Region
Kathy L. Moe, San Francisco Region

Journal Staff

Kim E. Lowry
Managing Editor

Christopher Pugliano
Financial Writer

Barbara Stahl
Financial Writer

Supervisory Insights is available online by visiting the FDIC’s website at To provide comments or suggestions for future articles, to request permission to reprint individual articles, or to request print copies, send an e-mail to

The views expressed in Supervisory Insights are those of the authors and do not necessarily reflect official positions of the Federal Deposit Insurance Corporation. In particular, articles should not be construed as definitive regulatory or supervisory guidance. Some of the information used in the preparation of this publication was obtained from publicly available sources that are considered reliable. However, the use of this information does not constitute an endorsement of its accuracy by the Federal Deposit Insurance Corporation.