英语文摘：Working through banks' troubled CRE loans to take time: U.S. Fed official

WASHINGTON, Feb. 4 (Xinhua) -- Working through the large volume of troubled commercial real estate (CRE) loans will take several years,although the U.S. CRE market and credit conditions has leveled off and there are some early signs of price stabilization in a number of key markets, a Federal Reserve official said Friday.

"Weakness in real estate markets, both commercial and residential, continues to be a drag on overall growth in the economy," Patrick M. Parkinson, director of Division of Banking Supervision and Regulation under the Federal Reserve, said in a congressional testimony.

Construction of nonresidential structures continues to lag because of weak fundamentals in the sector, including high vacancy rates and low property values, factors that are unlikely to change in the near term, he added.

Parkinson said that CRE-related issues also brought ongoing problems for the banking industry, particularly for community and regional banking organizations.

"Losses associated with CRE, particularly residential construction and land development lending, were the dominant reason for the high number of bank failures since the beginning of 2008, and further CRE-related bank failures are expected over the next few years," he said.

Parkinson stressed that losses in the CRE was considered to be an ongoing negative factor in bank portfolios and working through the large volume of troubled CRE loans would take several years as banks go through the difficult process of loan workouts and loan restructurings.

"While we expect significant ongoing CRE-related problems, it appears that worst-case scenarios are becoming increasingly unlikely. CRE portfolio loan concentrations are not a significant risk factor for systemically important financial institutions," he added.