Schwab’s unrealized losses on HTM securities are 171% of its equity capital. Higher than SVB. Highest among majors.

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That’s all fine until there’s a bank run. Then they might need to reclassify them as AFS and sell at a loss to meet the withdrawals, which was supposedly likely to happen at SVB before FDIC took over. They already sold their AFS securities at $1.8b loss. Now the Fed and FDIC have agreed to buy them at par for SVB, it sets a precedent and there should not be any problem. Emergency lending facility and FHLB should provide a reasonable backstop

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h/t rs06rs

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