When the mirage of market value changes meets reality

Silicon Valley Bank collapsed after too many depositors withdrew money. (Image: Getty)

Mon, 20 Mar 2023

One of the more startling facts spat out of the Silicon Valley Bank collapse is that US accounting rules allowed it to hold much of its investments in Fannie May paper at face value.This is because Silicon Valley Bank (SVB) had intended to hold these securities until they matured. A scroll through SVB’s latest filing with the US Securities and Exchange Commission (SEC), its annual report for calendar 2022, showed the portfolio of US$91.3 billion (NZ$148.3b) of mainly mortgage-backed securities was carried on the balance sheet at that...

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