The current banking crisis stems from the rise in interest rates catching sleepy risk managers with bond portfolio losses best left and forgotten in the good to maturity file. But the prices of those assets kept on dropping and in the case of SVB bank because of deposit outflow many billions of dollars were lost in forced sales of long term treasury bonds which when declared panicked depositors to clear out even more and caused its demise. Which brings up an idea of making long term treasuries payable at full face value when presented to Fed’s discount window and make treasuries the risk free asset regional bank managers have always considered them to be. This change would give regional banks a helpful hand to concentrate on what they do best without need of a professional staff to mitigate risk on its U.S. Treasury portfolio.
Mortgage Backed Securities, the other long term asset popular with financial institutions, shouldn't have this same advantage and require a professional team to mitigate the risk of investment's marked to market. Schwab, a big investor in MBS products, has suffered a loss in reputation much greater that its portfolio losses because as a firm purporting to be experts in financial instruments they look like they just fell off a turnip truck.
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