ECB Warns Banks’ Commercial Real Estate Hits Could Worsen Stress
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European banks’ exposure to commercial real estate could erode financial stability if the economy is hit by a bigger shock, according to the European Central Bank.
Commercial real estate markets “have the potential to significantly amplify an adverse scenario, increasing the likelihood of systemically-relevant losses being incurred in the banking system,” the ECB said in an excerpt of its financial stability review, which is scheduled to be published on Wednesday in Frankfurt.