The regulators and analysts worry that in a severe economic downturn, which most economists say is inevitable, the losses at commercial banks might be so large as to overwhelm the deposit insurance fund.
That would force the government to choose between raising insurance fees on the banking industry or rescuing some banks with taxpayer money.
The banks' real estate problems come on top of other troubled loans, including losses on lending to developing countries and other high-risk borrowers.
Regulators are increasingly concerned by the danger posed to the safety net of federal deposit insurance if the softness in real estate persists.
L. William Seidman, chairman of the Federal Deposit Insurance Corp., has issued stern warnings to bankers that real estate is ``an emerging area of real concern.''
``I've been the Cassandra of real estate forecasting for some time now,'' Seidman told bankers meeting in New York earlier this month, ``and unfortunately events confirmed this view.''
The FDIC insures individual deposits up to $100,000 at commercial banks and is considered the front line of the federal safety net.
Seidman and other experts say that in the last five years commercial banks have become alarmingly dependent on real estate loans.
Such lending accounted for 25 percent in 1985; it is approaching 40 percent this year. Two-thirds of all new lending is now related to real estate.
They note that with $3.22 trillion in assets the commercial banking system is three times as large as the savings and loan industry.
Unlike savings and loans, which concentrate mainly on real estate lending, banks have traditionally had much more diversified portfolios, lending to businesses and making personal loans as well as mortgages.
The size of the banking sector means that even a limited number of bank failures could be a drain on the deposit insurance fund.
The weakness of some commercial banks with large real estate loans has been compared to the savings and loan crisis, but the industries are quite different.
No one predicts that the entire banking industry will suffer the depth of trouble that shook the savings industry in Texas, and the experts do not expect a comparable regulatory failure.
Bank regulators have a much better record than their savings and loan counterparts in detecting and limiting problems.
Still, to combat the problem, regulators are getting tougher with banks in forcing them to set aside reserves for questionable loans.
For their part, many bankers also are worried by the impact of bad real estate loans, but most say the problem can be limited.
``It's pretty damn bad, and I hear the regulators are being extraordinarily tough,'' said Malcolm T. Murray Jr., chief credit officer for the First Union Corp. in Charlotte, N.C.
But Murray said he does not expect any big bank failures. ``There may be some hasty marriages,'' he said. ``But I am not sure the picture is quite as bleak as it has been painted.''
Charles T. Doyle, chief executive of the Gulf National Bank in Texas City, Texas, added: ``I am not overly gloomy. It is not anywhere near the kind of problem we were faced with in Texas.''
Some regulators, among them Robert L. Clarke, the comptroller of the currency, are taking a somewhat reassuring tone, announcing new computer monitoring procedures and systems aimed at detecting problems much earlier at banks exposed to real estate losses. …