Elizabeth Warren, chair of the Congressional TARP Panel, tells FOX Business Network that the commercial real estate problem is a serious threat to the economy.
Below are excerpts from the interview: Courtesy of Fox Business News
On how serious the commercial real estate issue is to the banking system:
“As the commercial real estate market is coming down—it’s dropped 40% already—they’re going to be in real trouble as these mortgages come up over the next few years.”
“We’re going to be seeing a lot of defaults, a lot of foreclosures, and it’s not just going to be hitting the investors—it’s going to hit the community banks.”
“They become more and more cautious or have less and less money to be able to lend to small businesses, and that’s what creates a big problem here. It’s like throwing a handful of sand into the gears on economic recovery, so that’s where our real problem is.”
On whether we need another bailout:
“The last place I ever want to be is when the Secretary of Treasury rushes in to say give me $700 billion because the economy is on fire.”
On the idea that bank CEOs had their arms twisted to TARP money:
“You really believe that? Come on.”
