JPMorgan Chase & Co. and Wells Fargo got back around US$38 billion of their riskiest investments in the first quarter as an increase in trading activity persuaded them the assets were easier and more simple to value.
Investors ought to keep an eye on for mobility among asset classifications in banks' available for sale securities portfolios. While Wells Fargo and JPMorgan Chase have been the most active in adjusting their characterization of available for sale securities, other large commercial banks could follow them soon, including Citigroup and Bank of America.
Banks currently hold billions of dollars of available for sale assets that they mark to fair value in every quarter. While banks hold billions in more risky assets, including asset backed securities, opaque structured credit products, and collateralized loan obligations, the greater part of those portfolios are made up of reasonably safe government bonds and mortgage packages backed by housing agencies.
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