Pimco Predicts Regional Bank Failures Due to Commercial Real Estate Woes

High concentration of distressed loans and rising interest rates threaten smaller banks' stability, warns asset management giant.

Pimco's John Murray highlights a 'very high' concentration of troubled commercial real estate loans on regional banks' books.
Defaults have increased due to higher borrowing costs and reduced demand for office spaces.
Mid-sized banks are particularly vulnerable as they hold a disproportionate share of these distressed loans.
Banks are expected to sell off challenged loans to reduce exposure, impacting their financial health.
Larger banks are less affected due to post-2008 regulations limiting their exposure to commercial real estate.