Did US hedge accounting rules contribute to SVB’s recklessness?

- By Rebekah Tunstead
- 04 Apr 2023

When Silicon Valley Bank’s deposit base nearly doubled in 2021 due to an influx of venture capital money, it had a big decision to make.

Having invested the cash in fixed rate bonds, SVB had to choose between classifying them as either held-to-maturity (HTM) or available-for-sale (AFS). HTM securities are carried on the balance sheet at amortised cost, while AFS holdings must be marked-to-market

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