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- Title
Commercial property and financial stability.
- Authors
Benford, James; Burrows, Oliver
- Abstract
Commercial property played a key role in the recent financial crisis in the United Kingdom. A rapid build-up of debt tied to commercial property investments pre-crisis supported a boom in prices. The consequent bust led to a sharp rise in non-performing loans. This episode has many precedents in the United Kingdom and parallels across countries. The structure of the commercial property market, and in particular the role of leveraged investors with significant maturity mismatches on their balance sheets, is important in understanding the market's dynamics and the risks it can pose. The new Financial Policy Committee will be alert to these risks and deploy tools to counteract them where necessary to protect financial stability.
- Subjects
UNITED Kingdom; COMMERCIAL real estate; FINANCIAL crises; INVESTMENTS; BANK loans; FINANCIAL statements; ECONOMIC policy
- Publication
Bank of England Quarterly Bulletin, 2013, Vol 53, Issue 1, p48
- ISSN
0005-5166
- Publication type
Article