Bank Capital Revamp Omits Long-Term Asset Issue That Felled SVB

The phonebook-sized plan from US bank regulators that would force banks to boost their capital buffers doesn’t touch a key reason that led to the demise of Silicon Valley Bank: deep losses in the bank’s stash of long-term assets.

Banks with at least $100 billion in assets would have to include gains or losses in the assets they label “available for sale” when they calculate their capital ratios, under the regulators’ new plan. But the proposal, unveiled by the Federal Reserve, Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency on July 27, doesn’t call ...