The Blubber

Analysts at JPMorgan, $JPM, have reportedly predicted that Washington could be compelled to take an emergency halt to stop short-selling given the banking crisis, per the Times.

Meanwhile, it was recently reported that in the third quarter of 2022, 722 banks had amassed massive unrealized losses over 50% of their capital, per Bitcoin.com. This could result in a hindrance to the bank's ability to meet potential unexpected liquidity needs.

Lokenauth, a reporter with 15 years in finance who had his words published in Forbes, Nasdaq, and TIME, shared the reason behind why banks had amassed this high of unrealized losses. It was explained that when interest rates were near zero, the financial institutions sought to purchase many bonds and Treasuries.

Because of this, the banks were affected, and the value of those bonds declined as the Federal Reserve raised rates in an attempt to fight against inflation. Lokenauth explained that older bonds with lower rates lose value as rising interest rates attract more newly issued bonds.

Lokenauth: "FDIC Chairman Martin Gruenberg has said that the current interest rate environment has had significant effects on banks' profitability and risk profiles."