Credit ratings have been continuously downgraded! What's even more terrifying is that the "thunderstorm" of New York Community Bank (NYCB.US) may not have stopped.

2025It is similar to small regional banks like New York Community Bank, which have a very large exposure to commercial real estate. They may be more negatively impacted than larger commercial banks because they lack large credit card investment portfolios or investment banking businesses that can shield them from the impact.Although in the last four years following the outbreak of the COVID-19 pandemic, the problems in the US commercial real estate market (especially office buildings) have been very apparent, the commercial real estate market has been somewhat unstable: due to the uncertainty of both buyers and sellers about the value of the buildings, the number of large transactions has significantly decreased. Now, with the need to address upcoming debt issues and the prospect of the Federal Reserve cutting interest rates, it is expected to trigger more transactions, making it clear how much the value has actually decreased. David Aviram, the head of Maverick Real Estate Partners, said: "New York commercial banks are much more conservative than signature banks." "However, because New York community banks have a larger proportion of loans backed by stable rental multi-family residential properties compared to their peers, changes in the rent laws in 2019 may have a greater impact on the CRE balance sheet of New York community banks." Aviram also stated: "So far, the percentage of delinquent loans reported by banks is just a drop in the bucket compared to the defaults that are expected to occur in 2024 and 2025." "Banks still face these significant risks, and the anticipated interest rate drop next year is unlikely to solve the commercial real estate issues banks are facing."