Federal Reserve: More than 700 banks in the U.S. are at risk due to significant unrealized losses on their balance sheets

ChainCatcher news, the Federal Reserve report shows that more than 700 banks in the United States are facing "significant safety and solvency" risks due to substantial unrealized losses on their balance sheets, with these banks reporting losses exceeding 50% of their capital.

The Federal Reserve pointed out that interest rate hikes are the catalyst for these losses among U.S. banks. Changes in monetary policy and rising interest rates have negatively impacted the balance sheets of banks, making the financial situation of many banks more precarious. Although these banks have been taking measures in recent months to prevent further losses, the substantial unrealized losses on their balance sheets have limited their ability to lend and meet obligations.

Additionally, higher-than-expected deposit outflows and limited emergency funds may force these banks to make difficult decisions, such as relying more on foreign exchange reserves. Therefore, U.S. banks need to take necessary measures to reduce risks and protect their safety and solvency. (source link)