Reported 4 months ago
A recent study warns that large US banks may have a significant blind spot when it comes to their exposure to commercial property due to the credit lines and term loans they provide to real estate investment trusts (REITs). Researchers suggest that the exposure of big banks to commercial real estate lending increases by about 40% when considering indirect lending to REITs. The study highlights the potential risks posed by these indirect exposures and calls for better incorporation of REIT exposure in stress tests conducted on bank capital.
Source: YAHOO