European Central Bank calls for clampdown on commercial property funds

The European Central Bank has called for a clampdown on commercial property funds to tackle the risk that a downturn in the €1tn sector could trigger a liquidity crisis if investors rushed to withdraw their money.

The ECB’s proposals reflect concern among regulators and investors that the recent turmoil in the banking industry could exacerbate strains in the commercial property market and push the sector closer to crisis.