The RMA Journal articles from May 2002

The RMA Journal archives from May 2002

V or W? You Choose. (from Your RMA Leadership)
May 1, 2002... Among the interesting phenomena of economic cycles is the lack of broad consensus as to where we are at any given point. Since hindsight is always 20-20, perhaps we should replace "forecasting" once and for all with "rearviewing." Neither, of...

It's Personal: And Everyone Knows It an Interview with Peter F. Stanton
May 1, 2002... It's been personal for the Stantons for four generations. Peter F. Stanton, current Chairman and CEO, and his predecessors (great-grandfather, grandfather and father) have successfully built Washington Trust Bank into the largest privately owned...

Final Basel Reform Proposal: Delayed Yet Again. (Capital Requirements)
May 1, 2002... Last December, the Basel Committee of the Bank for International Settlements (BIS) announced that the final proposal to reform the 1988 Capital Accord would be postponed until June 2002. That date has now been pushed back further, perhaps into...

Concepts of Portfolio Management; Part 2: Understanding and Using the Model. (Oldies, Still Goodies)
May 1, 2002... Part 1 of this article, published in April, presented a non-technical profile of portfolio management concepts with emphasis on their use as an important management tool. Part 2 focuses on standard models and their application to portfolio...

Inside the Enron Debacle. (Accounting Issues)
May 1, 2002... This article surveys what happened at Enron, the egregious accounting errors that were made, and future mitigants to this operational risk now under consideration. Enron's annual report states that its business is:...to create value and...

New Perspectives in Analyzing Real Estate Developer Financial Statements. (Lending To)
May 1, 2002... This first in a series of articles surveys historical approaches to analyzing real estate business financial results, provides insight into developer financial reporting, and offers some alternatives to the current "make-do" partial data...

Identity Technology Slowly Gains Momentum. (Fighting Fraud)
May 1, 2002... It may be a decade before we see widespread use of biometric technology, and its implementation will be driven more by desire for convenience than by privacy concerns. Nonetheless, multiple approaches to identity verification are the future. ...

Stress Testing the Commercial Loan Portfolio Why and How. (Stress Testing)
May 1, 2002... Stress testing is an important and evolving tool in risk mitigation, and banking regulators increasingly look for its use in institutions of all sizes. It is important to view stress testing as a risk management supplement--not a catchall--and...

Stress Testing Approaches and Outcomes. (Stress Testing)
May 1, 2002... This is the second of two articles in this issue of the Journal that were transcribed from a recent audioconference on the subject of stress testing. Another term for stress testing is "scenario analysis." If the future turns out to be...

Building Effective Indicators to Monitor Operational Risk. (OR)
May 1, 2002... Indicators are the measures used to monitor and predict operational events. They complement the self-assessment process to continually monitor the effectiveness of controls. Use them with escalation criteria to keep management informed of...

An Introduction to Valuing Intellectual Property (Part 2 of 3). (Issues in Lending)
May 1, 2002... Last month, we addressed methods of identifying and monitoring intellectual property already owned by the clients who make up your existing loan portfolio. This month we discuss the most common methods of valuing intellectual property....

Choosing the Right Business to Buy: A Dilemma without Redemption. (Financing Change)
May 1, 2002... A bank customer wishes to purchase a going concern. By agreeing to grant the loan, the lender says, in effect, "This is a good business, and you are making a wise decision." Is it? This article offers a discovery process that will lead the...

Expected Defaults of Commercial Mortgages: An Alternate Scenario. (Real Estate Quantified)
May 1, 2002... Mixed economic news has heightened uncertainty in all investment markets, leaving many investors trying to discern the downside exposure of their assets. Although many believe the worst may be over and a recovery is not far off, others hold the...

In the Midst of Expansion: Joan Brigante Likes Watching Her Chapter and Her Bank Grow. (RMA Volunteer Profile)
May 1, 2002... Suffolk County National Bank in Riverhead, New York, has experienced tremendous growth in the past several years. In fact, by regulatory definition, the bank is no longer considered a community bank but a regional bank. And, as vice president in...

Lending to Charter Schools. (Lending To)
May 1, 2002... The number of students enrolled in charter schools--independent alternatives to public schools--could quadruple by 2010. City First Bank of D.C. has two years of lending to charter schools under its belt and in this article shares information...

Whatever Happened to the NAICS? (North American Industrial Classification System) (Industry Classification)
May 1, 2002... Nearly three years ago, The RMA Journal presented "Moving Toward NAICS" (June 1999). At that time, author Mark Zmiewski reported that NAICS would replace the SIC code "eventually." So what's been going on? In the spring of 1997, the Office of...

Dissonance of Lending or Why Borrowers Shop around! (Sales Savvy)
May 1, 2002... There's a reason The New York Times is written on a seventh-grade reading level. No one has expertise in every area. And encountering the unfamiliar term or concept can make us stop dead in our tracks. Bankers need to practice the fine art of...

Legal Caveats in Commercial Lending. (Tales of WHOA!)
May 1, 2002... On the Docket: Bank may not rely on Bank Collection Code one-year notice provision when it pays unauthorized items in bad faith. In Ralph Falk II v. The Northern Trust Company, 763 N.E. 2d 380 (Ill. App. 1st Dist.) Ralph Falk 11 sued the...

The connectivity revolution. (Management Strategies).
May 1, 2002... In the aftermath of the dot-com implosion, it is tempting to relax and say, "Thank heavens, that's over." David Rowe argues that it is precisely in times like these that such complacency is most dangerous. "...the competition (that...

The Compliance Connection. (Regulatory Compliance)
May 1, 2002... Compliance is too important to take a back seat to other loan officer responsibilities. For a variety of reasons, however, this may be the case, especially in smaller banks, and improper documentation can have painful results. Loan operations...

If. (Management Strategies)
May 1, 2002... There's a big "if" attached to never having another Enron or similar disaster. If we believe that greed, convenience, and caving in to pressure will always trump doing what's right and taking pains to do it, we're sunk. It's up to each of us to...