Bank of America's Unrealized Losses on Securities Soar to $131.6 Billion
Bank of America reported unrealized losses of $131.6 billion on securities in the third quarter, but does not expect actual losses in the long-term. The bank's strong liquidity and ability to hold securities until maturity provide downside protection and flexibility to avoid mark-to-market losses. The holdings of low-yielding assets have constrained the bank's ability to generate higher profits, but the mounting unrealized losses are considered a "non-issue" from an accounting perspective. U.S. banks could be facing at least $650 billion of unrealized losses in their securities portfolios, with JPMorgan Chase reporting $40 billion in unrealized losses and Citigroup not disclosing losses for the third quarter.