Acting Comptroller of the Currency, Michael J. Hsu, has issued a warning about potential risks to the US banking system. Hsu advises banks to be cautious as credit markets begin to weaken, urging them to guard against a false sense of comfort from recent stability and to re-evaluate exposures. Banks should take actions to preserve capital, maintain strong liquidity, and practice disciplined risk management across all areas. Hsu identifies signs of stress in credit markets, particularly in consumer credit and certain segments of commercial real estate. The New York Fed’s latest quarterly report on household debt and credit shows a faster-than-usual rise in consumer debt, primarily due to an increase in mortgage originations. Billionaire real estate entrepreneur Jeff Greene also warns about the potential damage rising interest rates could cause to investors and US banks. Panic is increasing as people face the prospect of being unable to pay off loans due to higher rates and dropping rents. The real estate industry is heading into a challenging time.
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