Part 8/11:
Nonetheless, the issue remains fragile, especially among smaller banks with significant CRE exposure. Many loans are already starting to default as properties lose value just months before refinancing deadlines. The risk is that more banks face similar setbacks, potentially leading to a broader crisis.
What It Means for Everyday Investors and Consumers
For most individuals, the immediate risk seems contained. Large national banks such as JPMorgan Chase, Bank of America, and Wells Fargo are better capitalized, diversified, and stress-tested against such shocks. These giants are deemed “too big to fail,” with resources to absorb losses and continue operating even if some assets sour.