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new investors lost everything trying to stabilize
these six troubled Colorado banks. This will likely
make it more difficult for Colorado’s surviving
local banks to raise new capital as accredited investors become more cynical. Banks will likely feel
more pressure to shrink their balance sheets by any
means, a problematic strategy where performing,
high-quality loans transition to new banking
relationships and troubled customers have
nowhere to go.
Colorado banks are facing structural headwinds.
Many Colorado bankers have insisted that loan
demand is anemic, especially among the most
credit worthy borrowers with equity to fund new
ventures. Colorado’s banks are also expected to feel
more of the pain from Operation Twist, because
they rely more heavily on traditional yield spread
products and have less ability to take loan underwriting risk (limited by CRE exposure) or pursue
other diversified revenue sources. Larger regional
banks with operations in Colorado should fare
better under this scenario....
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This note was uploaded on 02/11/2013 for the course MGMT 231 taught by Professor Yu during the Spring '13 term at Bauder.
- Spring '13
- The Lottery