federal reserve bank examiners have stepped up their oversight of banks with significant exposure to commercial real estate according to michael barr the fed’s vice chair for supervision “i think it’s important for commercial realestate risks to be well understood and mitigated by community banks and smaller regional banks” barr said at a hearing before the house financial services committee on wednesday he noted that those institutions’ assets tend to be “more concentrated” in commercial realestate loans “we’re looking quite carefully at commercial realestate risks” he said the value of debt backed by commercial real estate has taken a hit in recent months due to rising interest rates and vacancy rates as the trend toward working from home has led some companies to cut back on their office space read more a ‘perfect storm’ from higher interest rates and a credit crunch threatens commercial real estate construction and jobs downtown districts of major cities are also seeing less foot traffic because of the workfromhome trend which has led retailers to reconsider how much real estate they need to lease barr said this combination of factors means bank executives and supervisors at the fed need to “understand their risks and to appropriately mitigate those risks” barr said regionalbank equities kre have been under pressure following the failure of several institutions including silicon valley bank and first republic bank bank stock prices have stabilized in recent days led by doubledigit gains in shares of pacwest bancorp pacw and western alliance bancorp wal  although they remain down more than 50 over the past year according to factset