The U.S. Financial Stability Oversight Council (FSOC) said the delinquency rate in commercial real estate is low but warned of rising office vacancies. The FSOC was set up after the global financial crisis and is comprised of heads from the Treasury Department, the Federal Reserve, and the SEC. The group stated that regulators are implementing measures emphasizing risk management and assessing the CRE loan exposure at their institutions. - In a meeting last week, the FSOC discussed the ability of market participants to manage their interest rate and liquidity risks in the current economic environment.
- The FSOC members believe the banking system is well-capitalized and has significant liquidity to help tackle any upcoming challenges.
- Last week, the Federal Reserve's Chair, Jerome Powell, told journalists that he is keeping an eye on commercial real estate and closely monitoring the situation.
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