| On Bank Failures Inner City
Press Asked IMF about CRE & NYCB in Wake
of Signature Bank
by
Matthew Russell Lee, Patreon Substack
SOUTH BRONX /
SDNY, March 7 – A year after
the failure of Silicon Valley
Bank and Signature Bank, the
International Monetary Fund
has warned of more trouble,
just as NYCB teeters. Inner
City Press on March 7 asked
the IMF about it, video here.
The IMF had
said, "the high concentration
of CRE [commercial real
estate] exposures represents a
serious risk to small and
large banks amid economic
uncertainty and higher
interest rates, potentially
declining property values, and
asset quality deterioration.”
Small banks
retain “exceptionally high CRE
concentration for which losses
could compromise their safety
and soundness”, it added.
Nearly 33% of US banks have
commercial property loan books
which are so big versus their
capital buffers that they
exceed regulatory guidance. So
where are the
regulators?
Inner City
Press asked the IMF
spokesperson, noting the
Mnuchin investment in NYCB
(and imposition of Joseph
Otting as CEO).
IMF Spokesperson
Julie Kozack replied that the
risk is real and is being
studied, with more to come in
the GSFR. Watch this site.
***
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