Magazine : Archives : 4th Quarter 2022

Market Intelligence

$450 Billion in Unrealized Losses The rapid pace of interest rate increases has proven to be a double-edged sword for banks. On the one hand, higher rates have expanded net interest margins in the second quarter of 2022 as banks made more money on floating rates and new loans. On the other hand, higher rates are cratering bank securities portfolios, normally a stable, staid aspect of the balance sheet. For the third quarter in a row, the banking industry recorded unrealized losses on investment securities, both those marked available for sale and those that are held to maturity, according to...