India, Oct. 27 -- US banks are facing growing losses on their bond investments as Treasury yields rise. Banks must decide whether to sell bonds worth billions of dollars at a loss or continue holding them and carry the losses on their balance sheets.

Both options come with financial risks for banks. Selling bonds would force banks to accept losses immediately. Holding the bonds could keep the losses on their balance sheets, weaken some measures of financial strength and limit the money they can return to shareholders, Reuters reported.

Higher interest rates could put further pressure on banks' financial strength. Brian Mulberry, chief market strategist at Zacks Investment Management, said that if interest rates remain high or long-term ...