Those markets are Portland, Phoenix, Dallas, Las Vegas, Atlanta, Nashville, Salt Lake City, Charlotte and Orlando. Let's keep those factors in mind. Let s turn to the third area of risk the area where bank management behavior plays more of a role. Strong competition in the financial marketplace has placed pressure on banks to look for ways to maintain market share and increase profitability. These pressures may also be forcing institutions to compromise their underwriting standards.
Banks become deeply committed to their borrowing customers.
When trouble arises, immediate extrication or unlending your bank's money is not an option. So keeping a wary eye on developments that affect the success of your borrowing customers and preserving flexibility are long-standing banking traditions. About one-half of the FDIC institutions are subprime lenders. The bank regulatory agencies have provided guidance on sub-prime lending on a couple of occasions and the FDIC may issue more. Subprime loans are particularly vulnerable to a down cycle.