On April 30, the federal banking agencies issued guidance on correspondent concentration risk. According to the agencies, this guidance is intended to promote prudent risk management practices among financial institutions. The guidance outlines the expectations of the agencies for identifying, monitoring and managing correspondent risks between financial institutions, as well as for performing appropriate due diligence on all credit exposures to, and funding transactions with, other financial institutions. The guidance supplements, rather than supersedes, prior guidance and became effective on May 4. For additional information, please see our client alert at http://www.mofo.com//files// Uploads/Images/100505Risks.pdf.