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May 18, 2009
Local Banks Face Big Losses
Journal Study of 940 Lenders Shows Potential for Deep Hit on Commercial Property
The Wall Street Journal
by Maurice Tamman and David Enrich
Commercial real-estate loans could generate losses of $100 billion by the end of next year at more than 900 small and midsize U.S. banks if the economy's woes deepen, according to an analysis by The Wall Street Journal.
Such loans, which fund the construction of shopping malls, office buildings, apartment complexes and hotels, could account for nearly half the losses at the banks analyzed by the Journal, consuming capital that is an essential cushion against bad loans.
article [subscription required]
NoLandGrab: If the prospects for commercial loans are bleak for the banks, they can't be very rosy for the borrowers, either, right? Especially those hoping to finance speculative arena/office/apartment complexes.
Posted by eric at May 18, 2009 11:27 PM