Popular Articles
Today Week Month Year


American banks are sitting on a TIME BOMB of $1.7 trillion in unrealized losses
By Arsenio Toledo // Apr 05, 2023

Banks in the United States are sitting on a time bomb of unrealized losses totaling around $1.7 trillion.

This is according to a study released on March 13 by the New York University Stern School of Business (NYU Stern) that took a closer look at the unrealized losses banks in the U.S. were likely holding. The study found that banks had a total of $1.7 trillion in unrealized losses as of December 2022. (Related: IMF head warns: Risks to stability of global financial system have increased after recent upheavals across banking sector.)

Unrealized losses are "paper" losses that result from banks holding on to assets that have decreased in value but they have not yet sold, which is what turns those assets into realized losses.

The unrealized losses of U.S. banks were nearly equal to the banks' total equity of $2.1 trillion. Philip Schnabel and Alexi Savov from NYU Stern, along with Itamar Dreschler of the University of Pennsylvania, noted that the value of banks' assets may have diminished by about 10 percent over the past year due to rising interest rates slashing the value of U.S. Treasuries and mortgage-backed securities, which make up a large portion of many banks' assets.

They and other financial experts warn that the recent declines in values of bank assets have very significantly increased the fragility of the American banking system, and even small fire sales of asset holdings put more banks at risk.

"As long as people aren't all coming in at the same time demanding their deposits back, you're okay," said Stephan Weiler of Colorado State University. But he added that the risk of this happening is rising as more Americans grow wary of keeping their assets in banks, especially following the collapse of major banks like Silicon Valley Bank.

Human knowledge is under attack! Governments and powerful corporations are using censorship to wipe out humanity's knowledge base about nutrition, herbs, self-reliance, natural immunity, food production, preparedness and much more. We are preserving human knowledge using AI technology while building the infrastructure of human freedom. Use our decentralized, blockchain-based, uncensorable free speech platform at Brighteon.io. Explore our free, downloadable generative AI tools at Brighteon.AI. Support our efforts to build the infrastructure of human freedom by shopping at HealthRangerStore.com, featuring lab-tested, certified organic, non-GMO foods and nutritional solutions.

"So, the chances of facing those unrealized losses are going up," warned Weiler, who noted that this could lead to more bank runs, which could turn into a downward spiral for America's banks.

Risk of total bank collapse rising as depositors take out more of their money from US banks

During the week ending on March 22, depositors took out $126 billion from U.S. banks, according to data from the Federal Reserve. Much of the outflow came from the nation's largest banking institutions.

Around $90 billion of the $126 billion in cash depositors took out came from the biggest 25 banks in the United States. Smaller banks, which suffered massive withdrawals the week following the collapse of SVB and Signature Bank, have become more stable, with Fed data showing that they actually gained back around $6 billion in deposits on a seasonally adjusted basis.

But despite this small bright spot, total industry deposits have still fallen to $17.3 trillion, down 4.4 percent from the same week a year ago. This is also the lowest level of total deposits since July 2021.

Analysts note that deposits have been declining at all banks for the first two months of the year, well before SVB's failure. Bank deposits were also down five percent annually during the fourth quarter of 2022.

"If our banking system can't find a way to turn things around, our entire economy will soon be in a world of hurt," wrote Michael Snyder for The Economic Collapse Blog. "When banks get into trouble, they start getting really tight with their money. That means fewer mortgages, fewer commercial real estate loans, fewer auto loans and fewer credit cards being issued. So it should greatly concern all of us that U.S. banks are bleeding deposits at an absolutely staggering pace right now."

Learn more about the state of the banking sector in the United States at MoneySupply.news.

Watch this episode of the "Brighteon Broadcast News" discussing how banks will start limiting withdrawals to stop bank runs caused by "customer behavior."

This video is from the Health Ranger Report channel on Brighteon.com.

More related stories:

Top 25 US banks lose $89.7B after withdrawals surge following collapse of SVB and Signature Bank.

Fed claims it warned Silicon Valley Bank management about risks stemming from its business model as early as fall 2021.

The Jim Price Show: Planned financial collapse seeks to put all banks under one controlled "umbrella" – Brighteon.TV.

US bondholders preparing to sue Swiss government over wipeout of $17 billion worth of Credit Suisse bonds.

Small and regional banks are being left to fend for themselves while big banks like Silicon Valley Bank are being bailed out.

Sources include:

GlobalResearch.ca

Investopedia.com

Fortune.com

Finance.Yahoo.com

Brighteon.com



Take Action:
Support NewsTarget by linking to this article from your website.
Permalink to this article:
Copy
Embed article link:
Copy
Reprinting this article:
Non-commercial use is permitted with credit to NewsTarget.com (including a clickable link).
Please contact us for more information.
Free Email Alerts
Get independent news alerts on natural cures, food lab tests, cannabis medicine, science, robotics, drones, privacy and more.

NewsTarget.com © 2022 All Rights Reserved. All content posted on this site is commentary or opinion and is protected under Free Speech. NewsTarget.com is not responsible for content written by contributing authors. The information on this site is provided for educational and entertainment purposes only. It is not intended as a substitute for professional advice of any kind. NewsTarget.com assumes no responsibility for the use or misuse of this material. Your use of this website indicates your agreement to these terms and those published on this site. All trademarks, registered trademarks and servicemarks mentioned on this site are the property of their respective owners.

This site uses cookies
News Target uses cookies to improve your experience on our site. By using this site, you agree to our privacy policy.
Learn More
Close
Get 100% real, uncensored news delivered straight to your inbox
You can unsubscribe at any time. Your email privacy is completely protected.