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Why Diversification Fails at Banks

South State Correspondent

Bankers have been taught to diversify their loan portfolio to reduce idiosyncratic (individual borrower) risk and to stabilize earnings. The thinking is that diversification-induced lending leads to banking resiliency. Spreading across geographic markets has substantial costs. in recessions (Leibowitz and Bova 2009).

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Why Diversification Fails at Banks

South State Correspondent

Bankers have been taught to diversify their loan portfolio to reduce idiosyncratic (individual borrower) risk and to stabilize earnings. The thinking is that diversification-induced lending leads to banking resiliency. Spreading across geographic markets has substantial costs. in recessions (Leibowitz and Bova 2009).

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What's With Regulator Agita Over Bank Commercial Real Estate Lending?

Jeff For Banks

Today, I read an American Banker article on how a multi-billion dollar bank is going to ramp up its business lending. To remind readers, in 2006 the OCC, Federal Reserve, and FDIC issued joint interagency Guidance on Concentrations in Commercial Real Estate Lending. They need a marketing person to title their reports.

Lending 60
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4 challenges banks and credit unions are facing today

Abrigo

They may include: - Competing and conflicting interests: growth vs. risk - Disconnected processes, departments and technology - Little transparency into portfolio health over time - Lots of data, few actionable insights. “As Speed to market is critical,” Brown says. “An

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LendingClub Settles With SEC, DOJ

PYMNTS

The DOJ investigation centered on whether LendingClub had – between January 2009 to September 2010 – misled its FDIC-insured loan originator, WebBank , leading the bank to underwrite over 200 loans that did not conform to the bank’s lending requirements. The DOJ Finding. Attorney Alex Tse. “We The Response.

Lending 135
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Predicting the Next Banking Crisis Is a Fool’s Game. Not Learning From the Last One: Equally Foolish

Jeff For Banks

The old borrow short, lend long strategy. Between 1995 and its peak in March 2000, the Nasdaq Composite stock market index rose 800%, only to fall 740% from its peak by October 2002, giving up all its gains during the bubble. Although community banks did not lend to sub-prime borrowers in any meaningful way, did we participate?

FDIC 78
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Keeping Small Business Afloat While Addressing Risk

Gonzobanker

small business market. Whether or not an institution has a formal small business credit portfolio, it likely has exposure to the small businesses in its market area. It is the response of these financial institutions that will be the most difficult and beneficial to the FIs and obviously to the small businesses in their markets.

Groups 68