Surviving the next economic downturn is expected to be one of the hot topics of discussion when lenders and credit risk professionals meet today and Tuesday in San Antonio for Robert Morris Associates' fall conference.

Although the daily ups and downs of the stock market are not a top priority for most association members, the recent volatility in equities is yet another reminder to bankers that loans made in good times will still be on their books when the economy's seven-year expansion slows or ends.

"Certainly the drop in the stock market last month, though most of it's been recaptured, sent a signal that things can go sideways," said Allen Sanborn, president and chief executive officer of Robert Morris.

"The management of risk must be done to make money, but also must be done with the understanding that sometime after you've made the decision to take that risk the downturn will occur. The challenge bankers have is that the economists aren't going to call it," he added.

Regulators' recent calls for increased vigilance against a relaxation of underwriting standards are also sure to be a major area of discussion among the credit professionals.

"Given a slowing economy and given some liberalization of lending standards in recent times, I think that the industry is going to see an increase in problem loans," said Paul M. Dorfman, executive vice president for credit policy and risk management at BankAmerica Corp. and chairman of Robert Morris. "They ought to get ready."

Indeed, lenders planning to attend said they will be paying close attention to a panel featuring senior regulators from the Federal Reserve, Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency.

Speakers and sessions will focus on four main issues facing lenders.

The risk management track will deal with loan portfolio management and reveal the results of a study of banks' portfolio management techniques that was done by Robert Morris and First Manhattan Consulting Group. It will also explore the risks surrounding year-2000 systems problems faced not only by lenders but also by their borrowers and vendors.

Using the Internet and data warehousing will be featured in the technology track, while the community banking track will address issues faced by banks with less than $15 billion of assets. A study of portfolio management techniques at community banks will be initiated at the conference, Mr. Sanborn said.

The fourth track focuses on specialized lending opportunities. It will cover lending to the health-care industry, the media and communications industries, subprime consumers, the high-tech and knowledge-based industries, real estate lending, trade finance, and the securitization or sale of problem loans.

Scheduled speakers include David A. Coulter, chairman and chief executive officer of BankAmerica Corp., and Herb Kelleher, founder, chairman, president, and chief executive officer of Southwest Airlines.

Monday's keynote speaker, Martin Mayer, author of "The Bankers" and a former American Banker columnist, said he will address some of the sweeping changes affecting the financial services industry, including the separation of lending functions from payment systems and the "difficulty of mixing the banking model of economic development with the portfolio investment model."

The conference, called "Network in San Antonio," is expected to give lenders an opportunity to work collectively rather than compete, said conference chairman William Perotti, executive vice president and chief credit officer of Frost National Bank.

Because the industry is evolving rapidly and competition is fierce, it helps credit professionals to "create an atmosphere where people can share ideas freely and exchange information without fear of competing against each other" Mr. Perotti said.

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