Powell: “Managing the crisis in the commercial real estate market”

The President of the US Federal Reserve (Fed) described the crisis in the commercial market, speaking in his established speech before the American Congress, while arguing that it is only for small and medium-sized banks. Jerome Powell highlighted as the big issue behind the crisis that “hits” commercial properties the increase in teleworking rates from the pandemic onwards, which left “empty” offices and other professional spaces in the city centres. “There will be losses” in banks, he admitted, while warning that it will be an issue for years. “The key is to ensure that smaller and medium-sized banks have sufficient funds to cover these losses,” he stressed. Answering a question about the collapse of Silicon Valley Bank Powell said “sure we did the right things there”.

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