CRE risks are disproportionately concentrated in smaller bank holding companies, who saw CRE as safer debt prior to the pandemic, and who are more exposed to a

CRE risks are disproportionately concentrated in smaller bank holding companies, who saw CRE as safer debt prior to the pandemic, and who are more exposed to a small number of high-value deals gone bad. (Leverage was already rising in that market from 2017 on, so it's questionable in retrospect whether that was true even then, but in general smaller banks thought they were cleaning up their balance sheets with high-quality debt.) The end result of any systemic crisis is likely to be regulator-mandated buyouts of smaller banks and CUs and even more aggressive concentration of banking power amongst the top twenty or so BHCs, similar to SVB ending up part of First Citizens.