Bank of England Needs to Monitor Commercial Real Estate Market — Carney

Bank of England governor Mark Carney said that BoE is keeping an eye in real estate investment trusts as sudden increase in commercial real estate properties can result to “concerns about 14-boe-epafinancial stability.

” According to reuters.com, Carney addresses the European Parliament’s economic affairs committee and said “We are watching some developments including…in the publicly traded commercial rest estate market, the unit-trust market, to ensure that is not a potential amplification channel of financial instability.”

Though Carney also noted that no actions are being made by the UK, monitoring the market “makes sense” as commercial real estate is the market where “British banks have taken large losses in downturns.”

In a report by telegraph.co.uk, deputy governor for financial stability Sir Jon Cunliffe said “prices in London were particularly stretched” and that their latest Financial Stability Report reveals that prime offices in West End are “overvalued.” Carney also noted that Solvency II rules for the insurers are needed to be…

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