“It’s not a liquidity problem it’s a solvency problem,” said Professor Tomasz Piskorski, a banking specialist at Columbia University, and one of the lead authors. The underlying crisis in the banking system continues to deepen as $5 trillion of commercial real estate debt taken out during the zero-rate era comes due in tranches. Emergency lending by the US federal authorities has bathed America’s struggling regional banks in short-term liquidity, disguising the slow-burn damage of the US commercial property slump.Ī sobering analysis by four of the country’s leading finance experts says this comfort blanket has created a beguiling illusion of stability.
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