IMF Warns U.S. Real Estate Sectors Could Bring Banking Crisis 2.0

Housing-Market / US Housing
Aug 05, 2010 - 02:44 AM

By: Dian_L_Chu

The International Monetary Fund (IMF) stress tested 53 large banking holding companies and published its findings last month. The report concluded that despite restoration of some stability, there remain certain important risks to the U.S. financial system and economy mainly coming from the real estate sectors:

Further increases in nonperforming loans due to high unemployment rate and significant weakness in the real estate sectors

Credit quality in the commercial real estate (CRE) sector - About $1.4 trillion of CRE loans will mature in 2010–14, nearly half of which are 90 days or more past due or “underwater.â€