The CMBS market in Europe and the United States exploded, and the mess after the financial feast

In the hustle and bustle of the financial market, the European and American CMBS (commercial real estate mortgage-backed securities) market used to be like a shining star, attracting the attention of countless investors. Recently, however, the market has been hit by an unprecedented "thunder", can not help but recall the old adage: "after the feast, there is a mess."

The CMBS market is the product of the deep integration of commercial real estate and financial markets. It packages the mortgages of commercial real estate into securities and issues them to investors to obtain funds. This approach solves the problem of financing difficulties in commercial real estate to a certain extent, and also provides investors with diversified investment choices. However, with the rapid development of the market, the CMBS market has gradually exposed some problems.

Driven by the interest, some financial institutions and rating agencies began to relax the review and evaluation standards for CMBS products. In pursuit of higher profits, they lumped less risky commercial real estate projects with riskier ones, and even packaged some loans of questionable quality into securities and sold them to investors. This kind of blind expansion and pursuit of short-term profit behavior has gradually formed a bubble in the CMBS market.

The main reasons for the CMBS market explosion in Europe and the United States are as follows:

First, the unstable global economic situation has hit the commercial real estate market. With the impact of the epidemic and the intensification of international trade frictions, the operating conditions of many commercial real estate projects have declined, resulting in the repayment ability of CMBS products being questioned.

Secondly, some financial institutions and rating agencies have committed serious dereliction of duty in the issuance and evaluation of CMBS products. In order to pursue profits, they ignore the control and management of risks, and even deliberately conceal or distort the truth to mislead investors to make wrong investment decisions.

Finally, investors blindly follow the trend is also one of the important reasons for CMBS market explosion. During the market's boom years, many investors flocked to CMBS, attracted by the high yields. However, they often lack sufficient professional knowledge and risk awareness, and are not sufficiently aware and prepared for the fluctuations and risks of the market.

The explosion of CMBS market has a profound impact on the financial market and the real economy. On the one hand, it led to huge losses for many financial institutions and investors, triggering panic and turbulence in the market. On the other hand, it also makes the financing of commercial real estate projects more difficult, which has a negative impact on the development of the real economy.

Financial institutions and rating agencies abandoned risk control and moral bottom line in pursuit of profits, and investors blindly followed the trend and pursued high returns while ignoring the existence of risks. This phenomenon of "after the feast, there is a mess" is not only a mockery of financial markets, but also a mockery of human wisdom.

Yet amid the chaos of this financial party, there is also hope and opportunity. First of all, it makes us realize the complexity and risks of the financial market and reminds us to keep a clear mind and a cautious attitude when investing. Secondly, it also encourages financial institutions and regulators to strengthen risk management and supervision, and promote the healthy development of financial markets. Finally, it also provides an opportunity for those investors with vision and strength to find new investment opportunities and value in the volatility of the market.

In short, the CMBS market explosion in Europe and the United States is a profound lesson and reflection. It teaches us about the risks and complexities of financial markets, and it also teaches us about hope and opportunity. In future investment, we should remain cautious and sober, strengthen risk management and supervision, and promote the healthy development of the financial market. At the same time, we should also seize the opportunities and challenges of the market and find new investment opportunities and value.