Buffett's old partner, Berkshire Hathaway vice chairman Charlie Munger, made a surprising comment on the current banking crisis in the US in a recent interview.

In an interview with the Financial Times on Sunday, Munger warned thatA storm is brewing in the US commercial real estate market. As real estate prices fall, the US banking industry is “flooded with non-performing loans.”

Munger said:

“A lot of real estate is not doing well anymore. We have lots of troubled office buildings, lots of struggling shopping malls, and lots of other real estate in trouble. There's a lot of sorrow outside.”

He added:

“Compared to six months ago, every bank in the US is currently tightening real estate loans to a much higher degree.”

Although Munger pointed out that the current market is not as bad as it was in 2008, he said,“The banking industry will have trouble, just like any other place will have trouble.”

Munger's warning comes at a time when US federal regulators are asking major banks to submit final takeover offers to First Republic Bank by Sunday afternoon. This is the latest news on the mid-size banking crisis in the US.

Although Berkshire has a history of supporting the banking industry during periods of financial instability in the US, the company has so far been averse to the collapse of Silicon Valley Bank and Signature Bank.

Munger believes that Berkshire's restraint is partly due to the risks that may be brought about by large commercial real estate loans from banks.

He stated:

“Berkshire has made some investments in banks and the performance is showing very good results. We have also had some disappointments with banks. It's not that easy to run a bank wisely; there are many temptations to do things wrong.”

edit/emily