Another bank subsidy America should kill off

THE SLOW-BURNINGSVBSVBSVB crisis in America’s small- and medium-sized banks has entered its next phase. Nearly a year on from (), New York Community Bank since it announced on January 31st that it was setting aside $552m to cover troubled loans secured against commercial real estate. Last spring the bank was a saviour of sorts, buying $38bn of assets from Signature Bank, around the same time as . Now it is the first example of a new set of problems facing the industry.The good news is that commercial real estate is a smaller problem for banks than the losses on securities which brought down and others. Lenders are protected by low loan-to-value ratios and not all commercial buildings are in trouble: it is rent-stabilised buildings and old, energy-inefficient office blocks that are suffering big write-downs. Banks that struggle will be those that are unusually exposed, or for which these losses are the last straw.