Regulators are concerned that the sector of commercial mortgage-backed securities will remain a possible source of systemic risk if financing problems cannot be resolved. "The revival of the commercial mortgage-backed security market is essential to stabilizing the commercial real estate market," said William Dudley, head of the Federal Reserve Bank of New York. "If the availability of funding for this market is not restored, the downturn in commercial real estate valuation and the losses for the holders of these assets will be greater. This will, in turn, likely further constrain credit availability. That's the vicious cycle we want to lean against."
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