U.S. Treasury Secretary Janet Yellen has warned that the financial system remains vulnerable to risks associated with commercial real estate and cryptocurrencies, despite an improving economic backdrop marked by low unemployment and cooling inflation. Yellen emphasized the need for ongoing vigilance from top regulators regarding credit risks in commercial real estate and urged legislative measures for a comprehensive federal framework addressing stablecoins and cryptoassets. The Financial Stability Oversight Council (FSOC) is also focusing on potential systemic risks related to artificial intelligence as it relates to financial services, advocating for enhanced expertise and regulatory tools. Yellen’s remarks coincide with a significant rise in delinquency rates for commercial real estate loans, indicating broader challenges within the sector.
