BankThink

The narrow, specialized definition of risk we've used for the past quarter century has facilitated risk modeling at the cost of excluding an entire category of risk.

Are appraisals accurate enough to impose death sentences on banks when there is such confusion in value terminology, assumptions and interagency appraisal guidance? Recent evidence from the commercial mortgage-backed security market suggests not.

It's become a tool for enforcing the Fair Housing and Equal Credit Opportunity Acts, but regulators haven't provided a framework for banks to carry out the actual intent of the CRA - prudently serving community credit needs.

What BTD did was shine a bright light on two stark facts: the economic downturn has left fewer high-value customers to compete for, and it left some institutions in better condition than others to compete for them.

Bankers drew the wrong conclusions from years of only insignificant losses resulting from poor liquidity risk management.