Large banks only halfway done with commercial losses

Large banks are only about halfway done with their commercial real estate losses, Morgan Stanley banking analyst Ken Zerbe said in a note to clients yesterday. Zerbe’s note predicted that U.S. commercial real estate losses could reach 10 or 15 percent of loans in this cycle. Banks with retail and office loans face the highest risk, Zerbe said. The note is unusual for Morgan Stanley, which usually views banks as secure.