Bankers express confidence in loans to REITs
Article Abstract:
Real estate investment trusts (REITs), which own and manage real estate by taking secured mortgages and reselling them as securities, have had their total market value skyrocket from $20 billion in 1992 to over $140 billion in 1998. Their aggressive buying has driven the recovery of the real estate market. However, as the stock prices of REITs began to fall amid fears of real-estate overbuilding, the Federal Reserve issued a warning to bankers to more closely scrutinize their REIT portfolios. Most banks have not let the warning dampen their enthusiasm for REITs, and most will not likely rein in their REIT exposure. The banking industry was not surprised by the Fed's warning because the Fed had been very clear about their concerns over REITs for the last several months, and many in the industry feel that the Fed is just doing its job. The Fed is mostly worried about the rapid growth of REITs using unsecured mortgages.
Comment:
Most bankers are not overly concerned about the Federal Reserve's recent warning on REITs which use unsecured mortgages
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1998
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State Street discloses SEC is investigating records' safeguards
Article Abstract:
State Street Corp. announced that the Securities and Exchange Commission (SEC) is conducting a probe into the bank's computerized financial records. The SEC is trying to determine if the records have adequate security safeguards. The announcement is the most recent government investigation into the company. In May 1998, State Street was investigated by the FBI about questionable political activities.
Comment:
Announced that the SEC is conducting a probe into the bank's computerized financial records
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1998
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After long-term capital, regulators scrutinize banks' ability to back loans
Article Abstract:
Bank regulators are looking into banks' ability to provide adequate collateral for loans to borrowers that are cloaked in secrecy. The scrutiny takes place following Long-Term Capital Management LP's near-collapse. However, regulators acknowledge that their ability to scrutinize banks is limited because they are usually forced to depend on a bank's data as they asses the risk of a borrower.
Comment:
Bank regulators look into banks' ability to provide adequate collateral for loans to borrowers that are cloaked in secrecy
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1998
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