It is indeed a matter of great concern that the top 4 banks are currently facing monumental losses, amounting to a staggering $205 billion, on their bond assets. Moreover, the entire banking system has witnessed an alarming figure of approximately $2 trillion in bond asset losses. This unfortunate situation emphasizes the vulnerability of banks and highlights the potential risks associated with these losses.One cannot overlook the fact that bank runs pose a significant threat to financial institutions. These sudden and massive withdrawals by depositors can swiftly erode a bank’s liquidity and ultimately lead to its demise within a matter of days. The repercussions of such events can be catastrophic for both depositors and stakeholders.Adding fuel to the fire, it has come to light that the Federal Reserve intends to continue raising interest rates. This decision might exacerbate the existing losses faced by banks, resulting in even greater financial challenges. The cumulative impact of rising rates on already substantial bond asset losses heightens concerns about potential systemic risks within our banking system.
The top 4 banks have $205 billion in losses on their bond assets.
The entire banking system has about $2 trillion in bond asset losses. Bank runs can wipe out any bank within days.
Plus the Fed plans to keep raising rates, making these losses even bigger. 🙄 https://t.co/1KBYOcyxYa
— Wall Street Mav (@WallStreetMav) July 11, 2023
Non-revolving credit (includes student and auto loans) contracted in May by -$1.26 billion … first decline since April 2020; quite rare to see contractions, as there have only been a handful since GFC pic.twitter.com/DEUBt9nILI
— Liz Ann Sonders (@LizAnnSonders) July 11, 2023
car loans are out pic.twitter.com/4bczOLZAxg
— zerohedge (@zerohedge) July 11, 2023