Authored by Mike Maharrey via Money Metals,

When the Federal Reserve started raising rates, it precipitated a financial crisis. The central bank managed to paper over the problem with a bailout program, but the crisis continues to bubble and percolate under the surface.

According to the latest data from the FDIC, the U.S. banking system is sitting on $517 billion in unrealized losses due to deteriorating bond portfolios.

Unrealized losses triggered the collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank in 2023.

According to the FDIC, unrealized losses on available-for-sale and held-to-maturity securities increased by $39 billion in the first quarter. That's an 8.1 percent increase.