At present, credit risk-management practices are perhaps least developed in measuring risk associated with exposures related to construction projects and to the financing of commercial real estate, which have grown rapidly, particularly among regional and community banks.
At all banks, such lending represented nearly 19 percent of all bank loans at year-end 2003 - the highest level thus far recorded - and accounted for essentially all the loan growth last year at banks with less than $ billion in assets. Despite the limited development of formal risk-management practices, credit standards applied to these loans have apparently been quite high.