This choice is subject to an assessment of the auditor on whether it is financially viable for the bank to hold the asset until maturity. Moreover, a large portion of banks’ assets consists of held-to-maturity loans to firms and households. For these assets, market prices are not readily available.
But, even if there is no market price, valuations of assets are not immune to rising interest rates. Hence, banks’ balance sheets may not yet fully reflect valuation changes. [29] Hidden losses have implications for supervision.