It's an interesting side effect of raising rates so quickly. Banks hold a ton of bonds/T-bills with low coupon rates, and as yields have risen with interest rates the value of those bonds has dropped.
It's not necessarily a problem if they can hold them to maturity (since they get the entire value back then) or if they sell them invest in something with a much better return. But when they need to sell them early to ensure liquidity or fund withdrawals, all of the sudden they're realizing some pretty big losses.
And it's definitely a potential larger issue. US banks' unrealized losses on the books for securities were $8B at the end of 2021 and grew to $620B by the end of 2022.
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