Bank Unrealized Losses
Monitor U.S. bank unrealized losses on securities portfolios. Large unrealized losses signal financial system fragility and potential credit contraction.
Current Value
Trigger Level: Forced selling risk in liquidity shock
AI Analysis
As of February 22, 2026, bank unrealized losses stand at $500 billion, indicating a warning signal for the financial sector. This level of unrealized losses suggests that banks are vulnerable to a liquidity shock, which could trigger forced selling and heighten recession risk.
What is the Bank Losses?
Unrealized losses on bank securities portfolios represent the mark-to-market decline in bonds held by U.S. banks. These losses don't appear on income statements but reduce banks' actual equity cushion.
Why It Matters for Recession Risk
Large unrealized losses constrain banks' ability to lend, sell assets, or absorb further shocks. The 2023 banking crisis (SVB, Signature, First Republic) was triggered by this exact dynamic.
Historical Context
Unrealized losses peaked at over $620 billion in late 2022 as rising rates crushed bond portfolios. While improving as rates stabilize, remaining losses represent ongoing fragility in the banking system.
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