An Analysis of the Impact of the Commercial Real Estate Concentration Guidance

Keith Friend, Harry Glenos and Joseph B. Nichols
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Joseph B. Nichols: https://www.federalreserve.gov/econres/joseph-b-nichols.htm

Reports and Studies from Board of Governors of the Federal Reserve System (U.S.)

Abstract: This paper analyzes aspects of the interagency guidance issued in 2006, titled “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices.”1 The recent financial crisis and recession provide an opportunity to consider the relationship between the guidance and banks’ commercial real estate (CRE) concentrations and performance during the downturn. This paper also analyzes how the share of banking institutions with high levels of CRE concentration, as defined in the guidance, has changed over time (part 2); documents the effect of CRE concentrations on bank failures (part 3); and studies CRE loan growth and bank capital strength since the 2006 issuance of the guidance (part 4).

Pages: 26 p.
Date: 2013-04
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Persistent link: https://EconPapers.repec.org/RePEc:fip:g00002:1322

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