Finally the Fed Says Something Positive About CRE

Federal Reserve Governor Lisa Cook, who recently became chair of the central bank’s Committee on Financial Stability, told the Brookings Institution on Wednesday that there is sufficient financial stability to withstand jolts from potential shocks. That includes from commercial real estate loans, she said.

The committee will “routinely monitor four broad sets of vulnerabilities to the financial system that could amplify shocks: household and business leverage; the use of leverage by financial institutions; the degree of maturity and liquidity transformation in the financial system, or, in plain English, ‘funding risk’; and asset valuations and risk appetite,” Cook said.