The Commercial Bubble is So 2009

NEW YORK (TheStreet) -- Commercial loans had been cast as a horrific mess headed straight for the banking sector as recently as six months ago, but the impact is proving to be less painful and more targeted than some had feared. Here's why: Big banks have relatively little exposure to commercial lending and learned an important lesson from the residential real estate meltdown. They tended to take big, preemptive write-downs on those assets early and were also able to raise a hoard of capital to cover future losses. For instance, commercial mortgages comprise just 7% of the loan portfolios of the Big Four money-center banks -- Bank of America BAC, JPMorgan Chase JPM, Citigroup C and Wells Fargo WFC -- according to Moody's. Other banks that were part of the Fed's stress test last year have more than twice that exposure, at 16%, while the rest of the banks rated by Moody's have one-quarter of their loan books weighted in commercial. To read the rest of this article, click here.