The RMA Journal articles from March 2002

The RMA Journal archives from March 2002

Lenders: Read the Small Print! (from Your RMA Leadership)
March 1, 2002... There are times when physical pain becomes so acute that the best relief is found in a philosophical approach to the cause of the pain. Thus, it seems with Enron and the complete breakdown of individuals, institutions, professions, and agencies...

Giving Credit Where Credit Receives Its Due: An Interview with Marco Suter. (Interview)
March 1, 2002... In real estate, it's "location, location, location." At UBS, it's "reputation, reputation, reputation." And effective risk management is a key contributor to maintaining this most valuable asset. UBS AG was created in 1998 following the merger...

Change of Ownership: A Lending Opportunity That's Not for the Faint of Heart. (Credit Fundamentals)
March 1, 2002... There are a number of financing issues associated with the acquisition of an existing business, especially when it comes to establishing the value of the business. We are the stewards of our customers' deposits and our stockholders'...

Enron's Deep Inner Meaning: The World's Biggest Bankruptcy Teaches Some Very Old Lessons. (Credit Fundamentals)
March 1, 2002... What are the lessons to be learned from the Enron debacle? There are plenty--for managers, for investors, for regulators, for everybody--including lenders. In all, the Enron bankruptcy serves as a useful reminder of some pretty profound truths...

Where Have RM Supervisors Failed? (Management Strategies)
March 1, 2002... A survey of how relationship managers perceive their immediate supervisors is summarized in this article. The four most frequently encountered failings are discussed along with related implications. The authors then identify how respondents...

Oldies, Still Goodies: Valuation, Loss Reserves, and Pricing of Commercial Loans
March 1, 2002... The author provides a background for estimating commercial loan defaults by using corporate bond default rates and offers a model to use this information for valuing, pricing, and setting loan loss reserves. Portions of this article dealing with...

Free Cash Flow: Free to Do What? (Credit Fundamentals)
March 1, 2002... Why don't more lenders use free cash flow as a tool in credit analysis? Maybe it stems in part from the variety of meanings given to the term. This article provides background to some of the variety of meanings of free cash flow and then offers...

Spilled Milk: This Appraisal Was a Fish Story
March 1, 2002... Don't get hooked on an appraisal that reflects just one use of a property, stay on top of industry trends, and give due diligence its due. In 1999 the state of Maryland was promoting the aquaculture industry by providing low-interest loans...

An Overview of Covenants in Large Bank Loans. (Loan Structuring)
March 1, 2002... As important as covenants are in managing lending risks, they are generally not at the top of the lender's knowledge base. Survey results offer information on the breadth and frequency of covenants as they appear on large bank loans. It's not...

Issues in Lending: Tips for Managing Commercial Banking Litigation
March 1, 2002... Banks are in the business of gathering deposits, ma king loans, and providing a broad array of services. Sometimes, however, bank management must turn its attention to commercial banking litigation. Although inevitable, litigation has not been a...

He Shoots! He Scores!: Act 3 in the Continuing Saga of Educating Yew. (Credit Fundamentals)
March 1, 2002... Act 3 opens in the paper-strewn and totally chaotic office of Young Eager Whippersnapper (Yew). Yew is just finishing an animated telephone conversation as Grizzled Old Veteran (Gov) paces slowly outside. Yew forcefully returns the telephone to...

Business Continuity Planning: A Risk Manager's Agenda for Operational and Credit Risk Management. (Risk Management Strategies)
March 1, 2002... This two-part article identifies current actions that risk managers need to take to strengthen their business continuity strategies. Part I focuses on operational risk management strategies for bank service delivery. Part II, to be presented in...

Tales of WHOA!: Legal Caveats in Commercial Lending
March 1, 2002... On the Docket: Lender's failure to perfect security interest in debtor's investment property causes loss of collateral to competing creditor. Roxco, Ltd. was a Mississippi construction company that had construction contracts with the State of...

OR: Creating an Operational Risk-Sensitive Culture
March 1, 2002... This installment of OR offers findings on four key attributes of a strong risk culture and environment: leadership and strategy, accountability and reinforcement, people and communication, and risk management and infrastructure. It defies the...

Lessons Learned-For Fun(damentals) & Profit: Steve Marks Sees Lessons Learned as the Gift That Keeps on Giving. (RMA Volunteer Profile)
March 1, 2002... Chicago Chapter President Steve Marks is truly an all-purpose banker. As first vice president and deputy division head in LaSalle Bank's Commercial Banking Group, Marks develops new business for the bank, underwrites credit, manages a portfolio...

Derivatives and Off-Balance-Sheet Risks. (Derivatives)
March 1, 2002... The risks often hidden in derivatives and off-balance-sheet transactions are of increasing concern to bankers everywhere. A team of credit analysts at an international bank has developed a framework for considering off-balance-sheet risks in the...

Automated Solutions to Problem Resolution. (Customer Service)
March 1, 2002... Customer retention begins with customer trust. Customer trust is built through a history of positive experiences. Customer attrition, on the other hand, can result from just one bad experience with a problem resolved unsatisfactorily. A new...