A recent FDIC report reveals that unrealized losses on investment securities for banks surged to $517 billion in Q1 2024, an increase of $39 billion from the $478 billion recorded in Q4 2023. This surge is primarily driven by higher residential mortgage-backed securities losses due to rising interest rates. The report also highlights a 21% increase in the number of banks on the FDIC’s “problem banks” list, rising from 52 in Q4 2023 to 63 in Q1 2024. The total assets at risk for these problem banks have increased from $15.8 billion to $82.1 billion, a 5.2-fold rise. Additionally, this marks the ninth consecutive quarter of unusually high unrealized losses since the Federal Reserve began raising interest rates in Q1 2022. Meanwhile, Chinese banks' net interest margins hit a record low in Q1 2024 as lending rates declined.