Cracks in the US banking system deepen as bond yields climb
As soaring interest rates create growing stress in the US banking sector, the country’s biggest banks are pushing back against proposed new rules requiring them to hold fatter capital buffers.
The US banking system is coming under intense pressure from rising interest rates, as rising deposit rates squeeze banks’ net interest rate margins, while losses on their massive bond portfolios continue to ratchet higher.
In its second quarter 2023 Banking Profile, the US Federal Deposit Insurance Corporation (FDIC) estimated that US banks were sitting on unrealised losses in their securities portfolio of $US558.4 billion in the second quarter, up $US42.9 billion (8.3 per cent) from the first three months of the year.
Loading...
Jill Margo was a senior writer at The Australian Financial Review.
