Banks must have also incurred large unrealized losses on their loan portfolios. Yet, the bank would continue to report the bond at its purchase cost of $1,000, and not report its “unrealized loss” of $350. For example, if a bank paid $1,000 for a 30-year treasury bond that was yielding only 2%, that bond would currently be worth about $650 after interest rates increased to 4%. Banks are not required to disclose how much less their bond and loan portfolios are worth due to the rise in interest rates. “Despite government intervention, it is very hard to tell how safe the banking system really is, and whether these new government backstops are going to end up costing taxpayers.
0 kommentar(er)
