Federal regulators have announced a significant overhaul of capital requirements for U.S. banks, potentially freeing up $20 billion for the largest Wall Street firms. The changes, which reduce required capital by nearly 5%, aim to boost lending and buybacks. However, a notable exception requires large regional banks to account for unrealized losses, a move linked to the 2023 collapse of Silicon Valley Bank (SVB). The SVB collapse highlighted the risks of excluding unrealized losses from capital reports, as the bank's failure was triggered by a sudden visibility of these losses. The new rules mandate that certain banks report these losses, increasing their capital requirements by 3.1%. This carve-out underscores the ongoing concern over bank stability and depositor confidence, despite broader deregulation efforts.