U.S. Banks Now Facing $482 Billion in Unrealized Losses, FDIC Data Shows
The financial health of U.S. banks is under growing pressure once again.
According to new data highlighted by Barchart, U.S. banks are now sitting on a staggering $482 billion in unrealized losses on their investment securities — a 33% increase from the prior quarter.
Largest Unrealized Losses Since Banking Turmoil Began
The chart provided, sourced from FDIC data, shows a worsening trend that started around 2022 and has only accelerated.
Unrealized losses — the gap between the book value and the current market value of securities held — have hit levels not seen since the banking stresses during the early 2020s.
Both held-to-maturity securities and available-for-sale securities are heavily impacted. Losses in these categories can weigh heavily on a bank’s balance sheet, even if they are not immediately realized through sales.
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Why It Matters
Rising unrealized losses are dangerous because they:
- Weaken banks’ ability to raise capital
- Increase the risk of liquidity crises if depositors panic
- Potentially trigger regulatory interventions or forced asset sales during times of stress
While banks are not required to realize these losses immediately, they significantly impact confidence — something the banking sector can ill afford as financial conditions tighten.
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