Hundreds of US Banks Face Insolvency as $5 Trillion in Debt Comes Due, Hybrid Work Empties Offices
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Many US banks are facing solvency issues due to $5 trillion in expiring commercial real estate debt and falling property values. Half have liabilities exceeding assets.
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The Fed's rate cuts and liquidity support have delayed bank failures but come too late to prevent a fresh wave of insolvencies as loans come due.
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Up to 1,000 banks may disappear through consolidation. Default rates could match the Great Recession.
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Occupancy rates show hybrid work is here to stay, with office rents plunging. This threatens a $650 billion "value destruction" in New York City office buildings.
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While not a systemic event like 2008, bank failures may resemble the 1990s savings & loan crisis with hundreds of closures but no financial meltdown.