Many financial institutions are required by law to hold UST, some of which have suffered declines comparable to TLT. This was in part a result of regulations post-GFC.
I'm surprised there hasn't been more reporting about this. Maybe everything's fine and there's nothing to see here.
If a bank classifies their long-duration Treasurys as held-to-maturity, they don’t need to mark the fluctuating value of the bond principal to market. [0]
Also, most other banks aren’t overly concentrated in one area that could collapse and force a bunch of customer withdrawals like Silvergate was (in cryptocurrency)
If there was a problem in banking bond holdings, it likely would’ve surfaced by now with the massive interest rate changes.
Comments
Many financial institutions are required by law to hold UST, some of which have suffered declines comparable to TLT. This was in part a result of regulations post-GFC.
I'm surprised there hasn't been more reporting about this. Maybe everything's fine and there's nothing to see here.
If a bank classifies their long-duration Treasurys as held-to-maturity, they don’t need to mark the fluctuating value of the bond principal to market. [0]
Also, most other banks aren’t overly concentrated in one area that could collapse and force a bunch of customer withdrawals like Silvergate was (in cryptocurrency)
If there was a problem in banking bond holdings, it likely would’ve surfaced by now with the massive interest rate changes.
[0] https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/loa...