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On paper, America's regional banks look healthy. Underneath the surface, there's a different story.

Underlying commercial real estate exposure, non-performing loans, and delinquencies have risen significantly.

Regulators flag banks for scrutiny if they're holding more than $3 in commercial real estate loans for every $1 of their own capital. Today, 53% of regional banks are past that line.

After the 2008 financial crisis, roughly 1 in 6 banks past that line failed.

In this video, I'll break down:
• How $3.1 trillion in commercial real estate loans ended up inside the U.S. banking system.
• Why smaller and regional banks hold about two-thirds of all commercial real estate loans sitting on U.S. bank balance sheets.
• How regulators measure commercial real estate risk, and why a loan can still count as performing after the building behind it loses value.
• What the strategy the New York Fed calls "extend-and-pretend" actually is.
• How extending a loan keeps it out of the delinquency numbers.

👉 I post (almost) everyday here: https://www.instagram.com/casuallyfinance/

All illustrations, visuals, and animations in this video are original and hand-drawn by a freelance artist.

Disclaimer: The information provided in this video and on this channel (collectively, the “Content”) is for informational, educational, and entertainment purposes only and does not constitute investment, financial, legal, or tax advice, nor a recommendation to buy, sell, or hold any security or investment strategy. Investing involves risk and you must do your own research. Nothing in the Content should be interpreted as creating a fiduciary relationship, financial advisory relationship, or client relationship of any kind. The host, the channel, and all affiliated entities expressly disclaim any and all liability for any direct or consequential loss or damage arising directly or indirectly from the use of, reliance upon, or interpretation of the Content. By viewing or interacting with the Content, you acknowledge and agree to these terms and release the host and all related parties from any and all claims related to your reliance on the information provided.


Did you miss our previous article...
https://trendinginrealestate.com/real-estate-trends/toronto-real-estate-just-hit-a-breaking-point