In a testimony before Congress, US Secretary of the Treasury Janet cited commercial real estate concerns in the financial sector. Yahoo Finance Live examines Yellen's latest comments, referencing New York Community Bancorp's (NYCB) recent troubles.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

[AUDIO LOGO]

JULIA HYMAN: Today Treasury Secretary Janet Yellen testified before the House Financial Services Committee on the state of the US economy. Now during questioning with lawmakers, Yellen called commercial real estate a concern but one that regulators were addressing.

JANET YELLEN: The banking supervisors have also been focused on commercial real estate and are working closely with the banks they supervise to discuss ways to manage and work with borrowers who have problems.

I'm concerned. I believe it's manageable, although there may be some institutions that are quite stressed by this problem.

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JULIA HYMAN: And Yellen's testimony comes amid a steep sell-off of New York Community Bank shares roughly one year after a series of regional bank failures, of course. And NYCB continues to sell off today. She was asked specifically, by the way, about NYCB and sort of demure, didn't talk about it by name, Josh, but she did say, we're monitoring the current banking stress carefully. But again, didn't mention that bank by name.

JOSH LIPTON: Yeah. I thought it was interesting she talked about the commercial property sector, because basically her point was, yes, losses, it's a concern, there's going to be stress. She's talked about interest rates, vacancy rates, loans coming due, but also kind emphasize that line regulators are on it, right, focused on the issue, basically, in many ways, echoing what Jay Powell told us on "60 Minutes." And in fact, used the same word "manageable."

JULIA HYMAN: Right. And the market believes it's manageable. If you look at how bank shares are trading, the sell-off does seem to be largely limited to NYC specifically. It's not a broad bank sell-off, if you will. So that implies the same thing. By the way, we are going to hear from her later this week as well. On Thursday, she'll talk to the Senate Banking Committee.

JOSH LIPTON: She was also asked, by the way, about some of the other subject we've talked a lot about, which is proposals to raise bank capital requirements, didn't want to go there, but simply said, listen, I'm going to let bank regulators decide what's right on that issue.