But up to now, most of what I've read and heard about the upcoming commercial real estate doom had been mostly isolated to smaller, regional banks. They were said to hold greater CRE risk than the bigger banks. While bad news for the FDIC's insurance fund, at least it would imply that the big banks might not need another bailout due to commercial mortgages going bad. But yesterday, Bair said:
Despite what you may be hearing, CRE credit problems are affecting big and small banks alike. In fact, CRE noncurrent and charge-off rates are higher at banks with over one billion dollars in assets than at community banks. Industry analysts expect CMBS delinquency rates to continue climbing.
That's pretty disturbing. Big banks are actually exposed to uglier commercial mortgages than smaller banks. But what does this mean in a broader context?