A recent report has identified 282 US banks with a combined $900 billion in assets that are facing a “toxic combination” that could lead to their collapse.
Risk Factors
According to the Klaros Group, these banks have:
- High exposure to commercial real estate loans
- Significant unrealized losses on their balance sheets
Names Kept Secret
Klaros Group has not released the names of the banks involved, fearing it could trigger bank runs.
Regulators’ Challenge
The large number of banks affected presents a significant challenge for regulators. Brian Graham, co-founder of Klaros Group, said, “If there were just 10 banks that were in trouble, they would have all been taken down and dealt with. When you’ve got hundreds of banks facing these challenges, the regulators have to walk a bit of a tightrope.”
Notable Example
One notable bank on the list is New York Community Bank (NYCB), which recently reported worse-than-expected losses and has seen a significant outflow of deposits.
