Commercial real estate loans outstanding have grown slightly over 100% in a decade. CRE borrowers took advantage of the incredibly low interest rates, an economy recovering from the Global Financial Crisis, and banks that in too many cases were less than diligent in underwriting loans. Presently, the amount of commercial real estate loans, as a percent of banks’ total loans, has grown to being slightly higher than it was in the last quarter of 2007. This worries me. Read more. … [Read more...] about Fitch Ratings Downgrades Loom for U.S. Banks Significantly Exposed to CRE Loans
Opinion
Rodríguez Valladares Testified Before the Senate Banking, Housing, and Urban Committee About Federal Reserve Accountability
The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 (S2155) directly influenced the supervisory culture and tone at the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. In my statement, I will focus on lessons learned from the failure of Silicon Valley Bank as well as respectfully recommend legislative and supervisory process changes at the Federal Reserve to improve the safety … [Read more...] about Rodríguez Valladares Testified Before the Senate Banking, Housing, and Urban Committee About Federal Reserve Accountability
PacWest Bancorp’s Imminent Demise Shows Bank Turmoil Is Widening To Smaller Banks
We have reached the point where the tide has gone out, and we are seeing what financial institutions have been swimming naked. A third California-headquartered bank, in less than two months, is looking like it is on the verge of collapse. Read more … [Read more...] about PacWest Bancorp’s Imminent Demise Shows Bank Turmoil Is Widening To Smaller Banks
The Federal Reserve’s Interest Rate Increases Create Default Risks In Major Sectors
The FOMC is likely to raise rates twenty-five basis points to a range of 5.0%-5.25%; this would put rates at about a 16-year high. This level of rate rises has been an unpleasant surprise for many consumers and unfortunately, even bank risk managers. Read more … [Read more...] about The Federal Reserve’s Interest Rate Increases Create Default Risks In Major Sectors
With First Republic Takeover, JPMorgan Is America’s Most Globally Systemically Important Bank
First Republic Bank is dead! Long live JPMorgan! JPMorgan's acquisition makes it the most globally systemically important bank (G-SIB) in the U.S. and number five globally only after the four Chinese G-SIBs. Read more … [Read more...] about With First Republic Takeover, JPMorgan Is America’s Most Globally Systemically Important Bank