Central Banks
Powell Says US Banking System Can Withstand Commercial Real Estate Threats
- Fed chief echoes Treasury Secretary Yellen, FDIC Chair
- He says Fed is working on it; overall threat is ‘manageable’
Federal Reserve Chair Jerome Powell joined a chorus of US officials who have argued that mounting bad commercial real estate loans will likely cause some bank failures, but don’t pose a risk to the overall system.
The central bank chief told lawmakers on the Senate Banking Committee on Thursday that the Fed is talking with lenders to make sure they are on top of potential losses. His comments repeated the assessment of Treasury Secretary Janet Yellen, who last month said there will likely be some failures, but the situation will be “manageable.”