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Economic Brief

Aug. 2, 2017

Richmond Fed Research Explores Surge in Commercial Real Estate Lending

The latest Economic Brief from the Richmond Fed suggests that some banks with high concentrations of commercial real estate (CRE) loans could be especially vulnerable to an economic downturn. In addition to holding high concentrations of CRE loans, banks potentially at risk exhibit rapid CRE loan growth and rely heavily on illiquid sources of funding, according to the brief.

The authors of the brief conclude, however, that banks’ overall risk exposures related to CRE lending do not appear to be as elevated as they were before the Great Recession.

The Richmond Fed’s Economic Brief series provides web-exclusive essays on current economic issues and trends. Sign up to receive an email notification when a new essay is posted.


As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District—including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia—to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.


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