US banks were holding a massive $620 billion in unrealized losses, according to the Federal Deposit Insurance Corporation (FDIC). This represents assets that have decreased in value but have yet to be sold.
A recent report by Morningstar highlights that a screen of US banks with at least $10 billion in total assets showed those with the largest exposure to unrealized securities losses on available-for-sale (AFS) securities. The report suggests that 20 banks are currently sitting on potentially huge securities losses.
Among the top four US banks, Bank of America (BofA) alone is shouldering roughly one-third of the combined $211.5 billion in unrealized losses. Regional banks with smaller deposit bases are reportedly suffering more severely, but large banks are also feeling the impact of these losses.
As the financial industry grapples with the potential fallout from these losses, it remains to be seen how this will impact banking operations and consumer confidence in the coming months.