The recent market turmoil exposed a new weakness in the balance sheets of large banks: they hold so many bonds that they can't avoid trouble when interest rates rise.

When long-term rates jumped by a full percentage point in May and June amid worries the Federal Reserve would taper its bond-buying stimulus programme, bank investments in mortgage-backed securities and treasuries got slammed. JP Morgan Chase, Bank of America, Citigroup and Wells Fargo saw a measure of the paper value of these holdings fall by more than $13 billion during the second quarter.