Bundesbank Vigilant on Commercial Property in ‘Weak’ Economy

Germany’s central bank said financial regulators are keeping a close watch on risks to lenders and investors from their exposure to commercial property amid a poor economic outlook.

Risks related to the asset class “remain manageable” for the financial system because a spike in losses on underlying loans is concentrated at “a handful of banks and insurers,” the Bundesbank said on Thursday. Still, liquidity risks in open-ended funds could amplify those developments, the central bank said in a statement.