Banks Are Extending Office Loans. Are They Also Pretending?

 

Many 2023 maturities were pushed into 2024, giving lenders more time for rates to drop 

Banks’ expected 2024 commercial real-estate maturities rose 35% from previous estimates.

They estimated that about 40% of banks’ CRE loans maturing this year are actually ones that were supposed to mature in 2023.

 “increasing role for alternative lenders.” This would especially be the case if banks need to be more mindful of their capital and risk levels as new rules come into play.

Wall Street Journal 4 April 2024

https://www.wsj.com/finance/banking/banks-are-extending-office-loans-are-they-also-pretending-f62ddd80

Gillian Tett: America’s commercial real estate - ‘pretend and extend’ need to end

Gillian Tett 21 March 2024

https://englundmacro.blogspot.com/2024/04/gillian-tett-americas-commercial-real.html

 

Banks are selling risk to hedge funds, private-equity firms through so-called synthetic risk transfers

Nov. 7, 2023  

https://www.wsj.com/finance/banking/bank-synthetic-risk-transfers-basel-endgame-62410f6c

One big reason the global financial system nearly collapsed in 2008 was banks relying on insurance-like instruments. They’re at it again.

Bloomberg editorial 25 March 2024

https://englundmacro.blogspot.com/2024/03/one-big-reason-global-financial-system.html

How to solve the financial crisis?

Let me tell you a little secret, folks.

Play for time. A few years of nice profits will help offset the big losses from past blunders

Allan Sloan, senior editor CNN, August 18, 2008

Interest rate cuts work their way through to the real economy by a number of transmission channels.

Cui bono? The banks, of course. The bank-bailout channel will be the only monetary transmission mechanism to function like clockwork. 

So do not be fooled by anybody who says that the central bank should cut interest rates for the benefit of innocent citizens

Wolfgang Munchau, FT January 20 2008

What's most disturbing about our collective long-term prospects is that all anyone really talks about today is how much and how quickly the Fed needs to cut interest rates,

how much and how soon fiscal stimulus should be applied, and whether we'll avoid a recession completely or just have a mild one as we've been trained to expect.

Tim Iacono, January 14, 2008

https://www.internetional.se/transmission.htm

"extend and pretend delay and pray"

https://www.nejtillemu.com//draghi.htm#buiteroct2014