U.S. Federal Reserve may close a loophole that allows some midsize banks to conceal losses on securities they hold, the Wall Street Journal reported on Friday, citing people familiar with the matter.
The Fed is considering ending an exemption that enables certain banks to inflate the amount of capital they disclose for regulatory reasons, the report said, adding that regulators are weighing the change after the collapse of SVB and Signature Bank last month.
Fed Vice Chairman for Supervision Michael Barr is leading a review of the Fed’s oversight of SVB, with the results of that review expected to be released by May 1.
The Fed did not respond immediately to a Reuters request for comment.
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