U.S. Treasury Secretary Janet Yellen on Tuesday said she is concerned about looming commercial real estate stresses on banks and property owners, but believes the situation is manageable with assistance from bank regulators, Reuters reported. Yellen told a House Financial Services Committee hearing that refinancings of commercial real estate loans coming due amid higher interest rates and high vacancies due to shifting work patterns "is going to put a lot of stress on the owners of these properties." Some banks also may come under stress due to lower demand for commercial real estate following the COVID-19 pandemic that shifted more work to home offices, but banking supervisors were "very focused" on helping banks manage these risks. "I'm concerned. I believe it's manageable, although there may be some institutions that are quite stressed by this problem," Yellen said. The multi-regulator Financial Stability Oversight Council is focused on commercial real estate and bank supervisory agencies are working closely with banks on ways the institutions can work with borrowers that have problems.
