In the United States, hundreds of small regional banks are feeling stressed and at risk of failure. Of approximately 4,000 U.S. banks analyzed by the Klaros Group, 282 face stress from their exposure to commercial real estate and potential losses from higher interest rates. Most banks facing risks are categorized as small banks or community banks. Although the risk is less systemic than that of large banks, community and regional banks are an important source of credit for businesses and local governments. “There is no doubt in my mind that there will be more bank failures,” former U.S. Federal Deposit Insurance Corporation Chair Sheila Bair told CNBC. Watch the video to learn more about commercial real estate risk, the role of interest rates on bank balance sheets, and the steps needed to relieve banks, from regulation to mergers and acquisitions.

Chapters:
1:40 Chapter 1 – Banks in trouble
4:56 Chapter 2 – Commercial Real Estate
6:21 Chapter 3 – “Unrealized” losses
7:51 Chapter 4 – Saving the banks
9:58 Chapter 5 – Regulation
11:57 Chapter 6 – Banking vulnerabilities

Produced and edited by: Andrea Miller
Reporting by: Hugh Son
Moderator: Christina Locopo
Supervising Producer: Lindsey Jacobson
Additional images: Getty Images

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Why hundreds of US banks are at risk of failing

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