Under the shadow of the iceberg, the US banking industry saw a staggering 22% increase in losses in the third quarter. Will SVB make a comeback and make an impact?

The unrealized losses in the US banking industry surged by 22% to reach $684 billion in the third quarter, just slightly below the record set in the third quarter of 2022. Following the collapse of SVB Financial, the Federal Reserve established an emergency bailout program that allows cash-strapped banks to borrow through financing plans to avoid selling bonds at a loss. However, with the increase in unrealized losses, banks are still utilizing the bailout program nine months after the crisis erupted, with the usage of the financing plan remaining at a record-breaking $114 billion, increasing by over $5 billion in November. If the bond market does not recover, there is a possibility of a liquidity shock to the banking system in March next year.