Yellen: Some Banks ‘Likely to Be Exposed’ by Real Estate Issues, and ‘Some of the Greatest Exposure’ Is in Community Banks

During an interview with MSNBC aired on Wednesday’s broadcast of “The 11th Hour,” Treasury Secretary Janet Yellen responded to a question on commercial real estate issues endangering banks in a way that impacts consumers by stating that the issue is “not likely to be a systemic” one, but “there are some banks that are likely to be exposed.” And “Some of the greatest exposure among banks is among community banks with very high concentrations in commercial real estate.”

Host Stephanie Ruhle asked, “One crack in our economy right now is in commercial real estate, specifically office buildings around the country are sitting empty. The owners are turning the keys in, walking away from the buildings. And this is a problem. Banks could see huge losses, and that could impact consumers. How worried are you about this?”

Yellen answered, “Well, it’s something that we’re monitoring very closely and trying to assess just how significant it is. Some of the greatest exposure among banks is among community banks with very high concentrations in commercial real estate. In my best judgment, this is not likely to be a systemic issue, but there are some banks that are likely to be exposed.”

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