US Banking Industry Faces Significant Risk of Collapse Due to Unrealized Losses and Deposit Shifts.
More than 700 American banks are facing "significant safety and soundness risk" due to massive unrealized losses on their balance sheets, according to newly released data from the Federal Reserve. The Fed points to its own interest rate rises as the catalyst for the losses, and says banks have been taking steps to try and avoid further losses for months, including changing the accounting treatment of their securities, hedging interest rate risk and retaining more tangible capital.