Fed’s Barr Says Regulators Are Eyeing Commercial Real Estate Risk
- Fed asking if lenders have done enough to brace for bad loans
- Central bank steps up pace of issuing findings and downgrades
This article is for subscribers only.
US regulators are “closely focused” on risks in commercial real estate loans, and have stepped up downgrades of supervisory ratings on lenders amid new strains on their finances, according to the Federal Reserve’s chief bank watchdog.
Supervisors are looking at what banks are doing to mitigate potential losses, how they are reporting risks to their boards and senior management, and whether they have enough reserves and capital to handle CRE loan losses, said Michael Barr, the Fed’s vice chair for supervision, in remarks Friday at Columbia University in New York.