Rulemaker Rejects Bank Accounting Change Spurred by SVB Collapse

US accounting standard-setters on Wednesday officially rejected calls to change a part of bank accounting rules that came under scrutiny during the spate of regional bank collapses this spring.

The Financial Accounting Standards Board unanimously agreed to stick to current accounting rules that allow banks to record their long-term assets at amortized cost instead of requiring them to be measured at fair value, a technique that captures the most-up-to-date value of assets but also injects volatility into earnings.

Amortized cost—the price paid, plus some adjustments—disguised just how little Silicon Valley Bank’s long-term holdings were worth because the bank didn’t have ...