BoE issues £5bn commercial property warning - papers 1 May

It sounded the alarm on a £5bn-plus wave of real estate defaults threatening to engulf the financial sector before it has recovered from the sub-prime crisis. In today’s Financial Stability Report the Bank warns that despite falls of more than 15pc in commercial property prices, banks have continued to pile into the sector and could now face significant losses. The office and professional building market is in the midst of its biggest crash in more than a decade and whilst banks have reported no major write-offs from the slump, this will not persist the BoE says. The paper also reports...