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Why commercial real estate concerns haven’t subsided for banks just yet
The softness in the commercial real estate market is not a concern of the past yet. Nordic banks remain most exposed to the CRE sector, but when it comes to climate change transition risks, these assets do not appear to be among the most vulnerable in Europe. Since central banks aggressively started hiking rates to fight rising inflation levels, commercial real estate (CRE) has been a key area of concern. Rising interest rate levels and a declining need for office space (due to the effects of working from home) have caused vacancy rates to rise and property values to decline. While the worst price declines are ... (full story)