New warnings of bank collapse have begun to surface due to massive unrealized losses, per the latest FDIC data.
Banks have now reported having more than $309 billion in unrealized losses for the second quarter ending on June 30 alone.
The FDIC reported that all 4,645 FDIC-insured financial institutions had $309.6 billion in unrealized losses on held-to-maturity securities.
According to Bank of America’s federal regulatory filing known as the Call Report, for the quarter ending June 30, 2023, it had $105.79 billion in unrealized losses on its held-to-maturity (HTM) securities, reports Wall Street on Parade.
Bank of America’s unrealized losses represents 34% of all unrealized losses on held-to-maturity securities reported by the 4,645 FDIC-insured commercial banks and savings institutions.
“Not only are Bank of America’s unrealized losses beyond the norm on a percentage basis, but the total dollar amount of its held-to-maturity securities are also far beyond the norm.
In terms of assets, Bank of America is the second largest federally-insured bank in the U.S. with $2.4 trillion in assets. (That’s just the federally-insured commercial bank unit of Bank of America. The bank holding company has $3.1 trillion in assets and includes the giant retail brokerage firm and investment bank, Merrill Lynch.)
JPMorgan Chase is the largest bank in the U.S. with $3.38 trillion in assets at its federally-insured bank (Chase Bank) and $3.87 trillion in assets at its holding company, says WoP.
CPA/CFA Sandy Peters says this extreme amount of unrealized losses is what cause Silicon Valley Bank (SVB) to collapse.
“This is what SVB did. At 12/31/2022, SVB reflected $91.3 billion of HTM financial instruments, 43.1% of its balance sheet, at amortized cost. Their fair value was only $76.2 billion, or $15.1 billion less than their carrying value.”
Why is No One Talking About This?
Wall Street on Parade is questioning why no one is willing to talk about these massive unrealized losses that have the potential to wipe out American’s money.
“Why does Bank of America have billions more of these debt securities than the global behemoth JPMorgan Chase? No one seems willing to talk about it,” reports the journal.
Sandy Peters says banks are good at hiding their financial burdens.
“What that means is that the financial statement carrying value of those financial instruments held-to-maturity is reflected at amortized cost, or what management paid for the asset sometime in the past plus amortization of the discount or premium from the face value.
The fair value is only disclosed on the face of the financial statement and in the footnotes. Any unrealized loss is ‘hidden in plain sight.’
“But management intent and business model do not change the value of financial instruments. The HTM classification only makes it harder for investors and depositors to see.”
Will we see bigger banks collapse this decade?
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Other Bank News Today
A US bank is now preventing families from accessing money, causing households to miss rent and fall behind on bills.
“This fourth day can’t reach customer service by chat or live agent. No transaction is allowed to go through although I have funds available. I can’t get groceries or Uber, idk what to do. Green dot has essentially stolen my money,” reports Tye Lanier.
More Green Dot Bank customers are speaking out against the bank in the latest scandal that has users trapped with no access to their money.
Many customers are having difficulty receiving a direct response from the bank’s customer service department, with many claiming to have been given the runaround.
“It been a month and I still haven’t been able to get my money from Walmart green dot. I have ask for a replacement card 4 time haven’t got a card yet my rent is due for last month and this month I think there trying keep my money,” says Marzell Land.
“From AZ have not gotten my money since Wednesday. I have a family and bills I have to pay. I know when they fix this problem I’m getting my money and I’m gone like the wind, this is not right,” reported Bobby Rivers.
“My funds are gone. I believe now the bank [Green Dot Bank] is holding it hostage. It’s my SS money and I can’t get it back, they keep extending the date.
I’ll get my new card with my money on it. This has been going on since August 1 and I was in the hospital when I was hacked…I want my money, it’s mine not yours green dot,” says Sandra Machuga, who’s reported to FrankNez before.
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