Sentences with phrase «concentrated loan portfolios»
As financial markets grew more sophisticated and financial institutions increased in size, new techniques were developed which helped alleviate the risks of concentrated loan portfolios.
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For example, Commerce Bancshares of Kansas City spreads its commercial loan portfolio across a large number of industries to manage risk and avoid concentrating it on any one particular industry that might take a shellacking.
Modern Capital Theory (MCT) concentrates on market decisions and provides valuable lessons for specific markets consisting of Outside Passive Minority Investors (OPMIs) who deal in «sudden death» securities, i.e., options, warrants, risk arbitrage, heavily margined portfolios, trading strategies and performing loans with short - fuse maturities.
I think that investors shouldn't be too concentrated in the risk of a handful of loans defaulting; they should be looking at a diversified investment portfolio.
If the mortgage scheme's portfolio is heavily concentrated in a small number of loans, or loans to a small number of borrowers, there is a higher risk that a single negative event affecting one loan will put the overall portfolio (and your money) at risk.
Is the issuer's loan portfolio heavily concentrated in a small number of loans, or in loans to a small number of borrowers?