bearish
112: More Thoughts On Banks' HTM Portfolio; Boston Fed Paper
SUMMARY
- The Boston Federal Reserve put out a short white paper on the Silicon Valley Bank crash and the accounting for debt securities known as held-to-maturity or HTM.
- It’s a nice short read and got me thinking about this issue again, which I examined back in May in Issue #100 (link below).
- The question, which has not definitively resolved itself in academia or policy circles, centers around bank accounting and whether banks should be allowed to value bonds they’re not planning on selling (hence the term held-to-maturity) based on amortized cost.
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