Australian shares are set for a muted open amid concern that global banking sector troubles could soon extend to commercial real estate.
ANZ’s Shayne Elliott said there will be casualties, as the attention of financial markets turns to Deutsche Bank’s prospects to outrun the banking crisis.On Wall St: Dow +0.4% STesla -0.9% Apple +0.8% Amazon -0.6% Block -1.9%Spot gold -0.8% to $US1978.21/oz at 4.59pm in New York10-year yield: US 3.38% Australia 3.21% Germany 2.12%Deposits at US lenders posted the biggest decline in nearly a year during the week when multiple bank failures triggered the latest bout of global financial turmoil.
“Under those circumstances, the risk is that a pull-back in lending, particularly by small banks, triggers a downturn in commercial real estate which, in a worst-case scenario, could develop into an adverse feedback loop.” Ashworth said commercial real estate, which accounts for 43 per cent of small bank loans outstanding, which is far higher than all other categories.
“While small bank lending in total is only 70 per cent of total lending by big banks, for commercial real estate specifically it is small banks that provide the lion’s share of funding. Small banks have $US1.9 trillion in commercial real estate loans outstanding, more than double the $900 billion extended by the big banks.
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