Newly released data from the Federal Reserve shows more than 700 American banks are facing “significant safety and soundness risk” due to massive unrealized losses on their balance sheets.
According to the Fed, more than 700 banks have self-reported unrealized losses that exceed 50% of their capital.
The report, which was recently released on the Federal Reserve’s website and includes self-reported data compiled in February, says banks have been taking steps to try and avoid further losses for months.
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Those steps include changing the accounting treatment of their securities, hedging interest rate risk and retaining more tangible capital.
The Fed points to its own interest rate rises as the catalyst for the losses.
“Banks with large unrealized losses face significant safety and soundness risks. Securities
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