Many U.S. banks should strengthen their appraisals
and stress tests for their holdings of commercial real estate, a Federal Reserve bank examiner told a congressional panel on Thursday."Many institutions would benefit from additional and better stress testing, improved management information systems, and stronger appraisal practices," Jon Greenlee, the associate chief of the Fed's banking supervision division, said in testimony prepared for delivery to the congressional Joint Economic Committee.
"Some banks need to improve their understanding of how concentrations -- both single-name and sectoral/geographical concentrations -- can impact capital levels during shocks," he said.
