We hope that interest rate risk will never again be the problem for depository institutions that it was for some in the 1980s. Asset quality remains an area for attention today, with nonperforming assets at 1.16 percent of loans and about 8 percent of tier 1 capital and reserves.
These figures simply do not compare with those of 1992 but tend to attract a supervisor's eye. Even at community banks, which have not been affected so much by the recent spate of highly visible problem borrowers, problem assets have increased to nearly 1 percent of loans and 6 percent of their capital and reserves.