Last week, the nations top banking regulators met on Capitol Hill to report to the Senate Banking Subcommittee on the financial health of the nations banks and financial industry. The panel included Sheila Bair, Charmain of the FDIC, and other regulators from the Fed and OCC.
The officials told the committee that losses on CRE loans posed the biggest risk to the banking system and in particular smaller banks whose exposure is greater to commercial real estate loan losses. Regulators said the government would issue guidelines to help the banks modify commercial mortgages.
Ms. Bair said that they are in the final steps of releasing administrative guidance to banks with examples as to what would be a prudent loan work out for commercial borrowers.
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