In Q3, “Unrealized Losses” on Securities Held by Banks Jump by 22% To $684 Billion

“Unrealized losses” at FDIC-insured commercial banks on securities, primarily Treasury securities and MBS, jumped by $126 billion to $684 billion at the end of Q3. This increase is linked to rising interest rates, which caused a significant drop in the market prices of these bonds. While these losses are considered temporary since banks will be paid face value at maturity, they can pose risks if they become permanent.