Massive unrealized losses put more than 700 banks in the US at risk, says Fed.
A public release, represented by the Federal Reserve Bank of Kansas City, discusses the growing risks of instability across certain banks under the impact of rising rates.
Data indicates that 722 American banks have suffered ‘unrealized losses exceeding 50% of capital.’ The high level of unrealized losses put banks at ‘significant safety and soundness risk.’
Banks Under Pressure
The Federal Reserve has reported that those banks have self-reported massive unrealized losses, indicating a potentially significant risk. This indicates that the value of certain assets held by these banks has decreased to a point where, if sold, they would generate a loss of more than half of the bank’s capital, resulting in a weakened financial position for the institution.
Alternatively, the Fed has revealed that American banks have taken measures to mitigate further…
