Banking regulators are no longer seeing the liquidity pressures on banks that they saw following the failure of Silicon Valley Bank last year, Federal Reserve Vice Chairman for Supervision Michael Barr said today. During a Q&A at a Washington, D.C., economic conference, Barr reiterated that the banking system is “sound and resilient,” although he added that there remain “pockets of risk.”
“[Supervisors] are looking at things like losses on the balance sheet and securities,” Barr said. “We’re looking at banks that have particular concentrations in commercial real estate. Commercial real estate covers lots of different sectors. The office commercial real estate sector is under stress more than other parts of the sector, and there is heterogeneity around the country. So we are looking at heavy concentrations in office real estate where there are significant expected price declines.”
