SVB Reignites ‘Third-Rail’ Accounting Debate Over Fair Value (1)

The collapse of Silicon Valley Bank is reigniting one of the most contentious debates in accounting history over banks that stash outsized portions of assets in a financial statement category that critics say hides risk for big losses.

Silicon Valley Bank put 43% of its portfolio in long-term assets that were recorded at the price it paid plus some adjustments. That’s nearly double the 22% average among the more than 230 banks in the Russell 3000 for which data is available, according to a Bloomberg analysis.

Relative to the average bank, Silicon Valley Bank recorded a larger share of ...