Viral V. Acharya is a professor of finance at NYU Stern School of Business; Manasa Gopal is an assistant professor at the Scheller College of Business, Georgia Institute of Technology; Maximilian Jager is an assistant professor at Frankfurt School of Finance & Management; and Sascha Steffen is a professor and DWS senior chair in finance at the Frankfurt School of Finance and Management
The commercial real estate sector is a cornerstone of the US economy, touching everything from urban development to housing markets and commercial ventures. Yet, the financial underpinnings of this sector, notably the provision of bank credit lines to major investors in CRE — Real Estate Investment Trusts — remain underappreciated. In a recent study, “Shadow always touches the feet: implications of bank credit lines to non-bank financial intermediaries”, we document the complex web of risks that arise from these underpinnings and underscore the need for a more comprehensive approach to financial sector regulation.
