Charlie Munger Raises Concerns Over Troubled Commercial Property Loans at US Banks
Charlie Munger, the vice chairman of Berkshire Hathaway, stated in a recent interview that American banks are burdened with poor-quality commercial real estate loans. His comments arrive amid the collapse of three major U.S. banks and the expected seizure of First Republic Bank by the federal government. Despite the potential challenges, Munger emphasized that the current situation is not as severe as the 2008 financial crisis, stating that “it’s not nearly as bad as it was in 2008.”
The renowned investor and vice chairman of Berkshire Hathaway, Charlie Munger, spoke to the Financial Times (FT) in an interview published on April 30, 2023, where he discussed potential issues facing the U.S. banking system.
The 99-year-old American businessman discussed some of the challenges facing financial institutions today. Munger specifically highlighted the amount of commercial property currently held by U.S. banks.
According to sources, American banks hold nearly $1.5 trillion in debt, which is due by the end of 2025. The decreasing value of this property has raised concerns, compounded by the ten consecutive federal funds rate increases since last year. “A lot of real estate isn’t so good any more,” Munger remarked.
