Investor and partner of Warren Buffett called one of the problems of US banks

Charlie Munger, an associate of billionaire Warren Buffett, said that one of the problems with US banks is “bad loans” in commercial real estate, now banks are issuing them more carefully,than before

One problem for US banks is "bad loans" in commercial real estate, Charlie Munger, an investor, Berkshire Hathaway vice chairman and friend of billionaire Warren Buffett, told the Financial Times (FT). Forbes estimates his fortune at $2.4 billion, Buffett at $115.3 billion.

“We have a lot of problematic office buildings, a lot of problematic shopping centers, a lot of other problematic real estate. <...> Every bank in the country today is much stricter about real estate loans than six months ago,” he said. However, according to Munger, the situation is not as bad as it was in 2008.

His Berkshire Hathaway is known for trying to support American banks during times of financial turmoil. For example, during the 2008 crisis, she invested $5 billion in Goldman Sachs, in 2011 the same amount in Bank of America, FT notes. The company remains aloof from the current problems.

In March, three financial institutions went bankrupt in the United States at once - Signature Bank, Silicon Valley Bank and Silvergate. At the moment, problems are observed at First Republic Bank: Bloomberg reports that its shares have fallen by 97%, and the US authorities are looking for ways to sell the bank before it goes bankrupt. Regulators have approached JPMorgan Chase & Co., PNC Financial Services Group and Citizens Financial Group with a request to submit their proposals, agency sources said. If no agreement is reached, the bank may become the property of the regulators.

New York University economics professor Nouriel Roubini (called Doctor Doom, or Dr. Rock), who once predicted the 2008 crisis, noted that the problem of regional banks such as bankrupts is the low level of insurance of the deposit base. Organizations act as lenders to households and businesses, so the current problems could cause a credit crisis, and it "makes the likelihood of a recession <...> much higher than before," since it will cover "a significant part of the US banking system."