American banks on alert for falling commercial real estate valuations
Senior officials said this week that US banks are becoming increasingly concerned about falling commercial property valuations and the risks to lenders’ balance sheets. Rising interest rates and the preference of many employees to work from home especially since the coronavirus pandemic has led to a decrease in office valuations. However, financial authorities sought to reassure investors that they do not expect significant systemic risk as the holdings are largely distributed among banks and other institutions. “What happens to commercial real estate, particularly offices” was State Street’s biggest concern, US...