Federal bank regulators are close to issuing guidelines that would encourage lenders to rework troubled commercial real-estate loans, a sector of the economy they expect to topple scores of additional financial institutions.
Federal Deposit Insurance Corp chairman Sheila Bair told a Senate subcommittee that reworking the terms of these loans could help banks avoid larger losses. She likened it to the push regulators made last year for banks to rework troubled residential mortgages.
Reworked commercial real estate loans 'should be encouraged, not criticized,' she said. 'We are encouraging banks to restructure these loans.'
Wall Street Journal