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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