Banking Trends: The Growing Role of CRE Lending
Commercial real estate has grown dramatically as a share of U.S. economic activity and is banks? largest lending category, particularly for small and midsize banks. It is also the riskiest part of bank portfolios. James DiSalvo and Ryan Johnston provide a primer. First in a series.
How Dodd–Frank affects small bank costs
Do stricter regulations enacted since the financial crisis pose a significant burden?
Banking Trends How Foreign Banks Changed after Dodd–Frank
The Great Recession and the Wall Street Reform and Consumer Protection Act of 2010 both affected how foreign banks operate in the U.S
The Rise in Loan-to-Deposit Ratios: Is 80 the New 60?
Liquidity ratios at small banks have climbed in recent decades. Why has this happened? Should regulators be concerned? A traditional signal that a bank may not have enough liquid assets to cover a sudden loss of funding has increased dramatically at small banks in recent decades. Small banks? median ratio of the value of their loans outstanding to the value of their deposits has risen from around 60 percent in the second half of the 1980s to around 80 percent today. Meanwhile, the same measure of liquidity has increased about 5 percentage points at large banks. How can we explain this big ...
Banking Trends: Estimating Today's Commercial Real Estate Risk
To survive a decline in commercial real estate prices such as occurred during the financial crisis, how much more capital do banks today need?
Banking Trends: Skin in the Game in the CMBS Market
Issuers of commercial mortgage-backed securities must now retain a portion on their own books. What evidence is there that the rule will reduce risky lending?
Measuring Cov-Lite Right
More business loans today lack traditional covenants governing borrowers. Does that leave banks with fewer tools to ward off default?
How Our Region Differs
The banking industry has undergone a sea change in the last 30 years. Regulatory changes and technological advances have led to dramatic increases in the size and market share of large banks, while banks have shifted their activities notably away from commercial lending toward real estate lending. While these broad trends are true of banks in the Third District served by the Federal Reserve Bank of Philadelphia, our regional banking market also differs in some interesting ways. Our small regional banks are larger and concentrate much more heavily on residential real estate lending and less on ...
Do Stress Tests Reduce Credit Growth?
Stress tests are supposed to ensure your access to credit during the next downturn, but some critics claim that they also limit your access to credit today. We test that theory.
Banking Trends: Why Don't Philly Banks Make More Local CRE Loans?
Nationally, local banks do a large share of commercial real estate lending, but this isn’t true in Philadelphia. We take a trip through the geography, history, and data of this unusual banking market.