@michaeljburry Ok, if its indeed this chart, so: In the US banking context, the unrealized loss % of Common Equity Tier 1 capital is a measure of the percentage of a bank's CET1 capital that is not currently being recognized as a loss, but could potentially become a realized loss in the future.
@michaeljburry Realizing these losses would mean having to recognize them on their balance sheet as actual losses. This would reduce its CET1 capital, which is a measure of its financial strength and ability to absorb losses & impact its ability to operate, meet regulatory requirements etc
@michaeljburry Ok, if its indeed this chart, so: In the US banking context, the unrealized loss % of Common Equity Tier 1 capital is a measure of the percentage of a bank's CET1 capital that is not currently being recognized as a loss, but could potentially become a realized loss in the future.
@michaeljburry Here, BAC has around 65% as unrealized loss % of CET1 capital and 60% of total deposits over $250,000, if these unrealized losses were to be realized, it could have consequences for the bank and its customers.
@michaeljburry e.g. if a bank has $100 in CET1 capital and $10 of unrealized losses, the unrealized loss % of CET1 capital would be 10%. This means that 10% of the bank's CET1 capital is at risk of becoming a realized loss if the bank were to sell those assets at their current fair value.
@michaeljburry To calculate the unrealized loss % of CET1 capital, a bank would first need to determine the fair value of its assets and compare it to their carrying value. If fair value is less than the carrying value, then the bank would recognize an unrealized loss, & reduce its CET1 capital
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We are happy to share #weeklyroundup by #Yeeldx
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1. Circle discloses $3.3B tied up at Silicon Valley Bank.
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2. Filing shows BlockFi has uninsured $227M in Silicon Valley Bank MMMF.
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Before he passed, Nikolai Mushegian, aka @delete_shitcoin sent me a link to a set of principles he had written up for his latest project. The link isn't available from the main site, so I want to share it here so that it is not lost to time.
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