“The Office of Supervision (OTS) has conducted internal reviews of recent savings association failures and has identified concerns regarding asset and liability concentrations and related risk management practices. Higher-risk asset and liability concentrations contributed significantly to the increase in problem banks and recent resulting failures. OTS is issuing this memorandum to re-emphasize important risk management practices for financial institutions boards of directors and management and to encourage institutions to revisit their existing concentration policies given the current economic environment.”
