ECB Warns Banks of Consequences for Poor Property Risk Management

The European Central Bank is signaling to lenders that they may face higher capital requirements if they have an insufficient handle on risks they face from commercial real estate, according to people familiar with the matter.

The watchdog is placing greater emphasis on the management of commercial property risks, in a dialog with banks that comes before the annual bar for their financial strength is set, said the people, who asked to remain anonymous as the discussions are private.