Hey Federal Reserve, welcome to the party.

WSJ: Banks in the U.S. "are slow" to take losses on their commercial real-estate loans being battered by slumping property values and rental payments, according to a Federal Reserve presentation to banking regulators last month.

The remarks suggest that banking regulators are girding for a rerun of the housing-related losses now slamming thousands of banks that failed to set aside enough capital during the boom to cushion themselves when the bubble burst. "Banks will be slow to recognize the severity of the loss — just as they were in residential," according to the Fed presentation, which was reviewed by The Wall Street Journal

Ironically, the presentation was developed by an Atlanta Fed real estate expert who is part of the Fed’s Rapid Response program, which is apparently designed to quickly sound the alarm about new problems.

So, why haven’t banks already been reporting trouble, if things are so serious? Easy. They just fudge the numbers, or they extend a loan, so they don’t have to write it.

This comes out a day after NY Fed President Bill Dudley warned of threats to the recovery, including CRE.

Read the whole thing >