From CNBC: 2024-05-01 10:06:31

Hundreds of small and regional banks in the U.S. are under stress, facing the risk of dipping below minimum capital requirements. Consultancy firm Klaros Group found that 282 banks are at risk due to commercial real estate loans and potential losses from higher interest rates. Most affected banks have less than $10 billion in assets.

While most stressed banks are not insolvent, communities could experience subtle impacts like lack of investment in new branches, technology, or staff. For individuals, the consequences of small bank failures are indirect. However, if a failing bank is insured by the FDIC, depositors are protected up to $250,000 per account category.

To learn more about the risks banks face with commercial real estate loans and the importance of interest rates, watch the video on CNBC. The video discusses potential solutions to relieve stress on banks, such as regulatory changes or mergers and acquisitions.

Read more: Why hundreds of U.S. banks may be at risk of failure