The Fed assigns a higher 150% risk weight to exposures to commercial real estate loans, up from a current 100% risk weight

WASHINGTON (MarketWatch)
The Federal Reserve on Thursday released a proposal that would implement a global agreement known as Basel III capital rules for banks, including a measure that would assign a higher risk weight to commercial real estate loans that are included in a calculation for how much capital an institution needs to hold as a buffer
The Fed assigns a higher 150% risk weight to exposures to commercial real estate loans, up from a current 100% risk weight
The Fed said these loans presented elevated risk over "several recent economic cycles
" Based on the proposal, which implements the international accord, banks will be required to hold the strictest form of common-equity capital of 7% of their risk-based assets, phased in between January 2013 and 2019