Stress tests overlooked CRE loan-loss potential

02/23/2010 | Risk.net (subscription required)

Stress tests of banks conducted by the U.S. government early last year overlooked hundreds of billions in potential losses on commercial real estate loans. A report released this month by the Congressional Oversight Panel for the Troubled Asset Relief Program warned that banks could realize up to $300 billion in bad commercial real estate loan losses. The bulk of the losses are expected to come as TARP expires Oct. 3.

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