Summers Says CRE Is More ‘Urgent’ for Fed Than Capital Rules

Former Treasury Secretary Lawrence Summers said the Federal Reserve and other agencies are right to be probing financial risks tied to commercial properties, saying this was a more important effort in the near term than its initiative to boost capital standards among big banks.

“Regulators are right to be concerned about commercial real estate,” Summers said on Bloomberg Television’s Wall Street Week with David Westin. “The chronic problem in banking is a failure to pay attention to the market value of assets,” and that’s a “particularly pronounced problem with commercial real estate, where there isn’t always a liquid market for properties,” he said.