The commercial real estate crisis hiding in plain sight ...Middle East

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The commercial real estate crisis hiding in plain sight
In a May 15 testimony to Congress, Federal Reserve Vice Chairman for Supervision Michael Barr states, “Overall, the banking system remains sound and resilient.” “The banking sector as a whole should be prepared to absorb loan losses that may materialize and continue fulfilling its vital role providing credit to households and businesses,” Barr said.  A closer look at the data suggests that a widely anticipated wave of commercial real estate loan defaults could spark enough bank failures to overwhelm the federal deposit insurance safety net. Commercial real estate loan concentrations and banks’ diminished capital loss-absorbing capacity have primed the system for a sequel to the 1980

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