I also want to mention up front that the proposed guidance is not intended to cap or restrict banks' participation in the CRE sector but rather to remind institutions that proper risk management and appropriate capital are essential elements of a sound CRE lending strategy.
In fact, many institutions already have both of these elements in place and may not need to adjust their practices very much. I believe we are all aware of the central role that CRE lending played in the banking problems of the late 1980s and early 1990s.