The European Central Bank (ECB) has issued a stark warning to banks regarding the management of commercial real estate (CRE) risk. Failure to adequately address this risk could lead to significant capital charges, signaling a looming crisis within the European banking system.

Understanding the implications of this warning is crucial. The ECB's vigilance underscores the potential for a wave of write-downs and losses, exposing the vulnerability of undercapitalized banks.

In my analysis, these banks are teetering on the edge and could serve as the epicenter of the next major financial market crisis. Such a crisis would likely reverberate beyond Europe, impacting global markets including Asia and eventually the United States.

It's worth noting, however, that American banks are in a comparatively stronger position, with Federal Reserve Chair Jay Powell having more room to maneuver with interest rates meanwhile the ECB already is doing yield curve control to avoid the collapse of public debt in the Eurozone.

BTW: who do You think is buying up all the USTs that are continually dumped by China and other states to maintain intereses in the US below their own level?