And while the regulatory agencies expect compliance with their own policies, they don't expect a one-size-fits-all approach. “They recognized that each bank is unique, and provided a framework for managing risk, but they stopped short of requiring a single policy for all lenders,” Tryon said.

Tryon sounded out two veterans of risk management: James King, VP and environmental risk manager with the real estate risk group at Fifth Third Bank; and Dev Strischek, SVP and senior credit policy officer for corporate risk management with SunTrust Banks Inc. The two charted the history, the present and the future of risk management. Strischeck noted, for example, that with regard to construction risk policy, regulators are looking more closely at whether banks are doing what their own policies say they'll do, commenting that “It's all about execution.” He also opined that with an uptick in earthquakes—some supposedly linked to hydraulic fractioning—seismic risk is likely to be on the radar screens of regulators at FDIC and OCC.

And even as risk management policies differ among lenders, the risks themselves differ among loans. “In some ways, you can make the argument that environmental risk is higher on small loans, at least on a relative basis,” said King. Click here to view replays of the webinar, which includes access to a Partner / Globe Street white paper on construction trends and risk management.