Quarterly Trends for Consolidated U.S. Banking Organizations 4th quarter 2022: Held-to-Maturity assets ~10% of assets.
Remember, unrealized losses on available–for–sale and held-to-maturity securities totaled $620 billion in the 4th quarter:
Recipe for systemic stress for the broader banking system?
- The combination of a high level of longer-term asset maturities and a moderate decline in total deposits underscored the risk that these unrealized losses could become actual losses should banks need to sell securities to meet liquidity needs.
- This latent vulnerability within the banking system would combine with several other prevailing conditions to form a key catalyst for the subsequent failure of SVB and systemic stress experienced by the broader banking system.
So are they tinkering with the Discount window rates to make it more appealing to borrow from the Fed vs selling the assets in this sort of situation?