The Unrealized Losses on the Balance Sheets of the Big Four U.S. Banks Have Risen to $205,000,000,000
According to recent research, the four major banks in the United States have accumulated unrealized losses of $205 billion across their balance sheets.
Losses from faulty bond market bets have been gathered by Bank of America, Wells Fargo, JPMorgan Chase, and Citigroup, according to the Financial Times, which cites new statistics from the Federal Deposit Insurance Corporation (FDIC).
As of the conclusion of the first quarter, Bank of America had recorded losses of $100 billion that had not yet been realised.
Silicon Valley Bank has become a symbol of the dangers of unrealized losses in the banking industry. hen the bank revealed in March that it had lost $1.8 billion on the sale of some of its bond holdings, the firm quickly collapsed.
Bank of America has said that it would not sell its portfolio of bonds, a decision that might reduce the interest it earns on deposits.
To prevent crystallised losses that are now merely theoretical, BofA has said that it has no intentions to sell the underwater bonds.
High-quality government-backed securities make up the bulk of the bank’s portfolio, guaranteeing repayment of the underlying loans.
The Federal Reserve reports that Bank of America and other large banks passed a recent stress test, despite suffering paper losses.
A hypothetical recession with total predicted losses of $541 billion was used in the test, which replicated “severely adverse” circumstances in the US economy. Nevertheless, 22 of the top 23 banks in the United States remained over the minimum capital requirements.
