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 Americaās federal regulatory filing known as the Call Report, for the quarter ending June 30, 2023, it had $105.79Ā billionĀ 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 Americaās 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. (Thatās 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.
āThis is what SVB did. AtĀ 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.”
Also Read: Bank of America is Freezing Accounts in New Scandal
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.
āWhat 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 āhidden in plain sight.ā
āBut 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.ā
Will we see bigger banks collapse this decade?
I’d love to hear your thoughts on this — leave a comment down below.
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Also Read: The US Treasury Direct is Now Freezing Customer Accounts
Other Bank News Today
A US bank is now preventing families from accessing money, causing households to miss rent and fall behind on bills.
āThis fourth day canāt reach customer service by chat or live agent. No transaction is allowed to go through although I have funds available. I canāt get groceries or Uber, idk what to do. Green dot has essentially stolen my money,ā 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.
Green Dot Bank is now facing fraud allegations from various customers who have been locked out of their account from weeks to months.
Many customers are having difficulty receiving a direct response from the bankās customer service department, with many claiming to have been given the runaround.
āIt been a month and I still havenāt been able to get my money from Walmart green dot. I have ask for a replacement card 4 time havenāt got a card yet my rent is due for last month and this month I think there trying keep my money,āĀ says Marzell Land.
āFrom 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 Iām getting my money and Iām gone like the wind, this is not right,ā reported Bobby Rivers.
āMy funds are gone. I believe now the bank [Green Dot Bank] is holding it hostage. Itās my SS money and I canāt get it back, they keep extending the date.
Iāll 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 hackedā¦I want my money, itās mine not yours green dot,ā says Sandra Machuga, whoās reported to FrankNez before.
Also Read:Ā Banks Are Now Closing Thousands of Accounts Daily
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If the big Banks start failing we will have much bigger problems in our country. We might as well burn our money/US dollars and go to Gold and silver standard. We can thank the Federal Reserve for this.
Banks have been following government capitaluzation mandates/guidelines by being prudent and buying 30 year T-bills. Then the US government pulled the rug out from under them (the banks) and hoisted interest rates in the fastest time in US history. This time around, the banks can’t be faulted.
Leave your thoughts below.