All articles tagged with #bond losses
Bank of America is expected to report significant losses on its large bond portfolio in its second-quarter earnings report, with the details likely to be included in the financial supplement rather than the main press release.
Charles Schwab, the largest publicly traded brokerage company in the US, saw its stock plummet 31% since March 8, when Silicon Valley Bank announced it needed to raise cash. Schwab's bank held roughly $28 billion in bond losses on paper at the end of 2022, an eerie parallel to Silicon Valley Bank, which held similar securities but had to sell them at a loss when depositors demanded their money. Rising interest rates have caused many banks to hold long-dated bonds with low interest rates, which have become increasingly unattractive as the Fed raises rates and new bonds with higher interest rates become available. Schwab's deposit base is made up of retail customers, and 80% of that money falls beneath the FDIC ceiling, easing any fears that their deposits could disappear.