Commercial real estate (CRE) lending is a risky activity that still dominates the business model of many modestly capitalized small and medium-sized banks. Bank supervisory and regulatory reforms recently enacted have reflected some of the lessons from the Great Financial Crisis of 2008 (GFC), but still underplay the importance of CRE lending and instead focus on bank size and nontraditional banking activities. My analysis (see Commercial Real Estate: How Vulnerable Are U.S. Banks?) shows that although banks have adapted their CRE lending practices, CRE loans have grown substantially among many small and medium-sized banks, defined here as those with … Read more