A bank's primary exposure to any outside business or institution is constituted by the amount of capital it has invested in it. The more a bank invests within a specific industry, the greater the risk to it if a business or industry collapses. The main risks a bank is exposed to can fall under two primary categories: credit exposure and market risk.

Credit exposure is created through any form of lending in which a banking institution engages. If a bank lends a million dollars to a business, there is always a risk that the business might not repay the loan within the agreed terms of the contract. In order to measure credit risk, it is necessary to calculate the total credit exposure of the bank's loan portfolio relative to a particular industry or company.

Market risk occurs based upon movements in the markets in which a bank is engaged. There are generally considered to be four primary influences on market risk: foreign exchange, interest rates, equity and commodities.

Foreign-exchange risk is fairly straightforward. If a bank invests in a foreign company and the currency exchange rate then weakens by 25% compared to the bank's currency, this increases the amount of the foreign currency owed to the bank. This cuts into the company's profits and can potentially even cause a default if the drop in value is significant.

Interest risk is a bit more abstract. When a bank loans money to businesses, the interest rate determines how much profit the bank makes. Once a contract is signed on a long-term loan at a set interest rate, if interest rates in other markets rise, the bank's profit margin on the loan will be reduced as they are required to pay higher interest on deposit accounts the bank holds.

Should a bank decide to invest directly in a business and purchase stocks or secure real estate, it assumes an equity risk. In this situation, the bank's profits are directly related to the underlying value of the stock or real estate it owns.

Commodities risk may be assumed by directly purchasing a commodity or derivative. A bank can also indirectly assume this risk through investment in or lending to a company that deals in commodities.

The Federal Deposit Insurance Corporation (FDIC), reported the following aggregate commercial bank loan exposure as of December 2014:

- Real Estate: $3.707 trillion
- Construction & Development: $222.5 billion
- Non-farm Residential: $1.055 trillion
- Multi-family Residential: $232.7 billion
- Home Equity Loans: $456.8 billion
- Other 1-4 Family Residential: $1.591 trillion
- Commercial & Industrial Loans: $1.651 trillion
- Loans to Individuals: $1.298 trillion
- Credit Card Loans: $638.4 billion
- Other Loans to Individuals: $660 billion
- All Other Loans and Leases (including farms): $983 billion

Additionally, the FDIC reports that banks own more than $19.75 trillion in real estate, with $6 trillion in commercial and industrial properties, and $4.8 trillion in residential sites. Therefore, real estate is by far the largest holding for commercial banks in the U.S.

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