Author(s): Teresa Curran, Federal Reserve Bank of San FranciscoThis issue of Supervisory Spotlight draws an analogy between our Olympic athletes and bank leaders, highlighting the importance of preparation to help ensure world-class performance. Whether it’s the next economic cycle, the ever-present threat of a cyberattack, or an unexpected liquidity need, we’ve found that bankers who are prepared to respond to multiple eventualities are the ones who can prevail over adversity and rise above the competition. One topic in particular is receiving increased supervisory attention: the building levels of commercial real estate (CRE) lending concentrations in the 12th District. Bank management teams at institutions that are highly concentrated in CRE loans are expected to have robust processes in place to monitor changes in real estate market conditions across their CRE lending footprints, helping to ensure that they are sufficiently prepared under a variety of economic scenarios.
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