Banks across the United States are currently sitting on approximately $306 billion in unrealized losses, primarily tied to bond portfolios impacted by higher interest rates.
When rates rise, the market value of previously issued lower yield bonds declines, creating accounting losses on bank balance sheets. While unrealized losses do not immediately impact cash flow, they can pressure capital ratios and investor confidence if liquidity tightens.
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U.S. BANKS FACE $306 BILLION IN UNREALIZED LOSSES
Banks across the United States are currently sitting on approximately $306 billion in unrealized losses, primarily tied to bond portfolios impacted by higher interest rates.
When rates rise, the market value of previously issued lower yield bonds declines, creating accounting losses on bank balance sheets. While unrealized losses do not immediately impact cash flow, they can pressure capital ratios and investor confidence if liquidity tightens.
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