US Banks’ Unrealized Losses Explode by $118,400,000,000 in Three Months As FDIC Declares 66 Banks on ‘Problem List’

The amount of unrealized losses on American banks’ balance sheets is surging. In its new Quarterly Banking Profile for the fourth quarter of 2024, the Federal Deposit Insurance Corporation (FDIC) says US banks reported a massive $118.4 billion increase in unrealized losses on securities, bringing the total to $482.4 billion. The FDIC says spikes in longer-term interest rates like the 30-year mortgage and 10-year Treasury rates lowered the value of bank securities, triggering the increase in unrealized losses. Unrealized losses are the difference between the price banks paid for securities and the current market value of those assets. Concern over such paper losses played a major role in the collapse of Silicon Valley Bank in 2023, as depositors panicked and withdrew funds after learning the bank sold securities at a steep loss to cover liquidity needs. Amid a 2.3% rise in banking profits, the FDIC said 66 banks are now on its “problem bank list,” a slight decrease from 68 in the prior quarter. Problem banks receive a rating of 4 or 5 on the CAMELS rating system since, indicating that the firm is experiencing financial, operational or managerial weaknesses – or a combination of such problems. The issues are so severe for these banks that they could threaten their soundness if unresolved. So far this year, the US has witnessed one bank failure. Regulators shut down Pulaski Savings Bank in January, pointing “suspected fraud” at the bank without explicitly naming the specific cause of its collapse. Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox Check Price Action Follow us on X , Facebook and Telegram Surf The Daily Hodl Mix Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing. Generated Image: Midjourney The post US Banks’ Unrealized Losses Explode by $118,400,000,000 in Three Months As FDIC Declares 66 Banks on ‘Problem List’ appeared first on The Daily Hodl .