Bank failures are coming. Here’s how it could play out

Bank failures are coming. Here’s how it could play out

More regional lenders will go under, experts say, and real estate is bracing for impact

The echoes began in May.

Barry Sternlicht of Starwood Capital Group predicted a regional bank failure “every day or every week.”

Days later, Newmark Chair Howard Lutnick warned, “Every single weekend a regional bank is going to go bye-bye,” and predicted 500 to 1,000 failures in 2025 and 2026 — as did alternative lenders speaking at the same event. In June, PIMCO’s head of global private commercial real estate joined the chorus.

Their take: The distress shaking commercial real estate — office, most violently — will collapse the small- and midsize banks that have been bread-and-butter lenders to the industry.

Most economists agree that because of rising rates, declining asset values and banks’ hesitancy to mark their loans to market, such failures are a certainty. The question is whether bigger banks and the Federal Deposit Insurance Corporation can stop collapses from spinning into crisis...


RSK: WIll your bank be one of the 600 fewer by the end of 2025? This is contrary to last week`s article where the Feds said almost all banks meet the threshold and will not default because of CMB loans.

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- - Volume: 24 - WEEK: 28 Date: 7/9/2024 7:31:44 AM -