Unrealized losses at U.S. banks have reached a record $512 billion, raising concerns about the stability of the financial system.
This phenomenon has persisted for 11 consecutive quartersnoting that problems in the banking sector have lasted longer than expected, according to a comment from The Kobeissi Letter.
Unrealized losses are those that a bank has booked but has not yet realized in cash, and are mainly linked to the impact of rising interest rates, which have eroded the value of bonds and other assets that banks hold.
Although they do not represent immediate losses, These decreases in market value can become risky. if banks are forced to sell these assets below their book value.
Bank of America is one of the most alarming examples. The institution has $110.8 billion in securities held to maturity, with unrealized losses representing 20% of its total investments, the report notes.
This situation has highlighted the magnitude of the problem in the sector, whose accumulated losses have already are seven times higher than those recorded at the peak of the 2008 financial crisis, as can be seen in the following graph.
Banks at risk continue to increase
In addition to the losses, The number of banks considered to be in trouble has risen to 66according to the Federal Deposit Insurance Corporation (FDIC), which is equivalent to 1.5% of all banking institutions in the country.
This growth in the list of troubled banks suggests a growing fragility in the financial system, which could have long-term effects on the economy.
In an attempt to mitigate these risks, the Federal Reserve decided on September 18 to cut interest rates for the first time in four years, as reported by CriptoNoticias.
However, the impact of this measure remains to be seen, as losses continue to affect banks’ ability to lend money, which could reduce the availability of credit for businesses and consumers, slowing economic activity.
This scenario also increases the presence of Bitcoin, which emerged as a direct response to the 2008 financial crisisAs banks continue to rely on government monetary policies, digital currency represents a decentralized alternative that, independent of state decisions, offers a resilient and intermediary-free financial network.
The current banking volatility reinforces the idea that Bitcoin could be a safe haven against financial collapses.
Rising unrealized losses and the growing fragility of the US banking system pose serious challenges to the country’s economic stability, with direct implications for credit, investment, and the future of the global financial system.
