How US banks can wiggle out of the $650 billion balance-sheet bomb hanging over them

• US banks are sitting on an estimated $650 billion in unrealized losses on their bond holdings.
• The surge in interest rates over the past 18 months drove bond prices lower, leading to bank failures earlier this year. 
• Here's why banks have flexibility in making sure that their $650 billion balance sheet bomb is defused. 

US banks have a ticking time bomb sitting on their balance sheets to the collective tune of at least $650 billion, but it will likely be defused rather than explode.