Missing Basel metric could have revealed SVB risks
US regulators did not implement economic value of equity test that SVB failed badly in 2021
The failure of US authorities to implement a key international regulatory threshold for measuring interest rate risk in a bank’s loan and deposit businesses left supervisors without a tool that would have highlighted the spiralling risks at the country’s sixteenth largest bank.
The now infamous Silicon Valley Bank (SVB) had been running colossal interest rate risk according to the metric, which bankers say would have triggered supervisory intervention under rules that have already been
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