CRE Concentrations Affecting Who Gets Bailout Money

While the FDIC, FRB, OCC, and OTS promised that the 300% CRE to risk-based capital ratio would be used lightly and viewed according to risk, it appears that the Treasury has a different idea. Treasury Secretary Henry M. Paulson Jr. has been clear that the federal bailout money is for healthy financial institutions. The Treasury has not publicly said how they define “healthy,” but NY Times DealBook obtained a list of questions that regulators are using to assess worthiness. Near the top of that list:

Is the level of commercial real estate loans relative less than 300 percent of a bank’s regulatory capital?