But where banks' exposure to commercial real estate is concerned, locating that fire may be difficult.
Rising interest rates quickly increased the cost of borrowing for investors in commercial real estate, including offices and multifamily homes.
It doesn't reveal details such as borrowers' track records, said Mark Hillis, a former chief risk officer for commercial real estate at JPMorgan.
There's also varying concentration risk: the largest banks with commercial real estate exposure are more diversified, meaning that any losses won't be as devastating, Baker said.
"We think very few banks will run into issues just from their commercial real estate exposure," Reidy said.
Persons:
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Organizations:
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Locations:
multifamily, Basel, CRE, California, Rockland, National Bank of Florida