Ever since the Federal Reserve started raising interest rates in March 2022, the banking industry has been facing a challenging time. Banks typically invest heavily in long term US government bonds. As we had learned about bonds payable, their market values (i.e. present value of future bond payments by debtor) decrease as interest rates increase. Bank after bank have seen the value of their held-to-maturity marketable securities plummet due to the rising interest rates.

Please comment on the news article. Feel free to share any thoughts that you might have. For example, you can look up the financial statements or news of another bank. How much held-to-maturity securities does it have on its balance sheet? What is the size of these investments compared to net income? Is the bank at risk of failing? Do you feel that your deposits are safe in your bank(s)? Why or why not?