Stress tests ignored commercial real estate threat, Congress warns

US banks face hundreds of billions of dollars in losses on commercial real estate (CRE) loans - a danger that was missed by the Capital Adequacy Program (Cap) stress tests in early 2009.

The Congressional Oversight Panel for the Troubled Asset Relief Program, in a report issued yesterday, predicted that banks could see up to $300 billion in losses on their commercial real estate portfolios, and warned the threat this poses to the US financial system was completely overlooked by the Cap. Between

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