The pandemic continues to worsen. Commercial real estate prices have fallen sharply this year as people stop entering offices and retail businesses are disrupted. According to a recent report, this could lead to huge losses for banks. In the second quarter of 2020, the total volume of office leases in the US fell by 53.4% year on year, the biggest drop on record. Singapore's office rents fell by the most in 11 years in the third quarter. Rents for office space fell by 4.5% in the quarter ending in September. A global index of commercial real estate prices based on seven major markets has fallen by 6% from last year, according to data firms. In a report, Oxford Economics said commercial real estate loans had suffered heavy losses in previous recessions and there were signs that this could be repeated during the COVID-19 pandemic. A fall in the price of large commercial real estate usually results in big losses for banks. Writing off commercial real estate loans has been a major cause of bank losses in the past two recessions. During the severe financial crisis of 2008, such loan losses accounted for 25% to 30% of total US loan write-offs. In the worst case, these loan losses would "severely erode" bank capital, the report said. In addition, Slater noted that hotel occupancy rates are low, customer traffic in the retail sector has plummeted, and many offices have closed. He indicated that, under the circumstances, the rental income and debt-servicing capacity of the affected sectors were seriously in doubt. According to a research report by Wells Fargo, once commercial real estate owners can't pay their loans, the value of their mortgages will fall, and the average value of their mortgages will depreciate by as much as 27%, posing a huge risk to mortgage banks. Financial risks have been quietly piling up, and Slater and his team are concerned that the COVID-19 pandemic could lead to long-term problems for banks and the financial system through huge losses in the commercial real estate sector.