(Bloomberg) -- US banks’ paper losses from two key types of securities they hold deepened last quarter due to further stresses in the housing market, according to the Federal Deposit Insurance Corp.

The FDIC said Wednesday that unrealized losses across the sector on available-for-sale and held-to-maturity securities increased by $39 billion to $517 billion in the first three months of 2024. It’s the ninth straight quarter of “unusually high unrealized losses” since the Federal Reserve began raising interest rates, the regulator said. 

Martin Gruenberg, the head of the FDIC, told reporters his agency’s supervisors were focused on the issue. Despite the increase in paper losses and in the number of lenders included in the regulator’s “Problem Bank List,” the FDIC chair said in its Quarterly Banking Profile that the industry remained solid.

In a statement, Gruenberg said that overall banks’ net income rebounded and asset quality metrics “remained generally favorable.” He added that the industry’s liquidity was “stable.”

Regulatory Agenda

The FDIC chair said last week that he would step down following findings of a toxic work environment put the regulator at the center of a heated political fight and fueled calls for his removal. On Wednesday, he repeated that he planned to remain on the job until a successor was confirmed by the US Senate. 

Read More: FDIC Probe Finds Credible Allegations of Toxic Workplace (2)

Beyond the FDIC, Gruenberg’s eventual exit could have significant ramifications for the Biden administration’s regulatory agenda and the financial industry. 

Gruenberg told reporters Wednesday that as long as he remained at the FDIC, he would continue to work with the Fed and Office of the Comptroller of the Currency to complete new capital rules for banks. He also said the agency is close to proposing a measure to ensure that banks can easily access funding in a pinch.

(Updates with comments from Gruenberg beginning in third paragraph.)

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