Episode 263: What is Extend-and-Pretend?
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This episode examines a recent report from the Federal Reserve Bank of New York titled “Extend-and-Pretend in the U.S. CRE Market.” This report was published in October 2024. The report shows that banks “extended-and-pretended” CRE mortgages in the post-pandemic period to avoid write offs against their capital and this led to credit misallocation and a buildup of financial fragility. A link to the report is included below.
Link: Extend-and-Pretend in the U.S. CRE Market - FEDERAL RESERVE BANK of NEW YORK
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