Published on 12 Feb 2024 on Fortune via Yahoo Finance
While the languishing commercial real estate market may be ‘manageable,’ a top analyst reminds us...
Good morning. The spotlight has returned to regional banks amid the struggling commercial real estate market.
“It feels like a problem we’ll be working on for years,” Federal Reserve Chair Jerome Powell said in a recent 60 Minutes interview. He said that “it’s a sizable problem." However, from looking at the larger banks' balance sheets, it appears to be "a manageable problem," Powell said. He doesn't see much risk for a repeat of the 2008 banking crisis, but some smaller and regional banks that have concentrated exposures in commercial real estate are challenged, he said.
Meanwhile, Treasury Secretary Janet Yellen told lawmakers on Feb. 7 that she’s “concerned” about the combination of high interest rates and vacancy rates plaging the commercial real estate market, Fortune reported. Yellen also said she believes the situation is manageable “although there may be some institutions that are quite stressed by this problem.”