Charlie Munger Says U.S. Banks Are Full Of Bad Commercial Property Loans: 'There's A Lot Of Agony Out There'

Berkshire Hathaway Inc. Vice Chairman Charlie Munger made a startling comment about the ongoing banking crisis in the U.S. during a recent interview.

In an interview with the Financial Times that was published on Sunday, Munger warned that a storm is brewing in the U.S. commercial property market, with American banks “full of bad loans” as property prices fall. 

“A lot of real estates isn’t so good anymore,” Munger told the publication. “We have a lot of troubled office buildings, a lot of troubled shopping centers, a lot of troubled other properties. There’s a lot of agony out there.”

“Every bank in the country is way tighter on real estate loans today than six months ago,” he added.

Also Read: Charlie Munger Labels US Healthcare A 'Disgrace' as Report Shows Lowest Life Expectancy Despite Highest Spending

While noting that the current market is not as bad as it was in 2008, Munger said "trouble happens to banking just like trouble happens everywhere else.” 

Munger’s warning comes as federal regulators recently asked banks for their takeover offers for First Republic Bank.

Berkshire has a history of supporting U.S. banks through periods of financial instability but has distanced itself from the Silicon Valley Bank and Signature Bank collapse.

“Berkshire has made some bank investments that worked out very well for us,” Munger told the Financial Times. “We’ve had some disappointment in banks, too. It’s not that damned easy to run a bank intelligently; there are a lot of temptations to do the wrong thing.”

Now Read: Charlie Munger's 3-Word Piece Of Advice Helped Warren Buffett And Could Help You Too

Photo: Shutterstock