European banks are different this time

 “This is a risk confronting all banks,” 

Sheila Bair, who ran the Federal Deposit Insurance Corp. from 2006 to 2011:

“I don’t see regional banks as having any particular problem,” 

“All examiners need to be on alert for how interest-rate risk is being managed. If there is a run, they will need to sell these securities. Those are the kinds of things all-size banks, and all examiners should be worried about.”

The FDIC estimated that U.S. banks had some $620 billion of unrealized losses from securities on their books as of the end of 2022, including longer-duration Treasurys and mortgage securities that have become worth less than their face value.

MarketWatch 23 March 2023

Higher rates mean falls in the price of assets with a long duration. 

Plenty of people, including, we now know, some of the stricken banks, effectively bet that rates would stay low forever by piling up on long-duration assets such as 10-year Treasuries. 

Buying long-term fixed-rate government bonds when you have short-term floating-rate liabilities is a very basic mismatch — so basic that everyone in finance assumed it could not happen again

Englund: Duration Risk (

US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941.

Niall Ferguson, FT 10 February 2010

Next Bubble U.S. Government Bonds (

Why should Europe be different?


"Europeiska storbanker har i grunden en helt annan affärsmodell" ???

Varför hotar stigande räntor bankernas stabilitet? Carl Johan von Set förklarar.

Englund: Varför hotar stigande räntor bankernas stabilitet? Carl Johan von Set förklarar. (


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