Banks as investments can be riskier as the Commercial Real Estate Market hits rock bottum. Due to their accounting practices for most loans, banks can absorb credit losses over time, litterally allowing them to write off their way out of trouble. A downside of this approach is that Banks use it to postpone the recognition of losses. And commercial real-estate lending is one area where losses are quickly growing and not yet recorded.
The longer commercial real estate remains depressed, the greater commercial real-estate losses could end up being larger than expected for the banks.
