The jump in borrowing costs threatens to create fresh problems for the banking sector
The yield on two-year Treasuries rising to 5% this week represents the “pain trade for a lot of the banks”
“If you just track unrealized held-to-maturity and available-for-sale losses at banks, the pressure is on,”
The demise of SVB Financial Group came about in large part because its balance sheet was burdened by long-term loans whose value plummeted as yields rose on the back of Federal Reserve interest-rate hikes.
Bloomberg 22 August 2023
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