Fink says banks could see reduced income from fees in a decline of CMBS issuance.
NEW YORK CITY—The diminution of the CMBS market could pose long-term risk for both larger and smaller banks, Trepp LLC recently told the Federal Reserve's Board of Governors. That risk stems from both a reduction of capital available to banks through CMBS and from an increase in exposure to commercial real estate.
With issuance already down year to date, Trepp sees a further drag posed by the the new risk retention rule mandated under Dodd-Frank. After the new rule takes effect on Dec. 24, “Many participants are saying that we'll see market share reductions for CMBS, because CMBS volumes could be cut by as much as 50%,” Thomas Fink, SVP and managing director, told the Fed governors in a presentation now available as an on-demand webinar through Trepp.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
