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Renewed CRE Worries Evident in ECB Warning to Banks

ECB
  • The ECB have warned European banks that capital charges could follow if CRE risks are not well managed internally, according to Bloomberg. However, they also cite officials as saying that they do not see a big hit to bank capital on CRE losses.
  • Follows renewed worries around the CRE sector in Europe this week, with Morningstar data this morning showing "Retail investors are pulling more than €1 billion a month from real estate funds in Europe, with slumping demand and a surge in borrowing costs raising concerns about commercial property valuations."
  • Headlines earlier this week from German regulator Bafin also of note: “BaFin has a watch on the current market developments and is reflecting them in its supervision”

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