March 12 (Reuters) - The U.S. Federal Reserve is considering easing the terms for banks to access its discount window to prevent another collapse similar to Silicon Valley Bank, Bloomberg News reported on Sunday, citing people familiar with the matter.
The move would enhance the capacity of banks to meet the withdrawal requests of depositors, without having to book losses by selling bonds and other assets that have declined in value amidst the rise of interest rates, the report said.
Some banks began drawing on the discount window Friday, seeking to shore up liquidity after authorities seized the bank's remaining assets, the report said, adding that it was unclear how many banks did so.
At least one would have normally used the New York Federal Home Loan Bank (FHLB), Bloomberg reported.
The Fed declined to comment on the report when contacted by Reuters. New York FHLB did not immediately respond to request for comment.
Startup-focused lender SVB became the largest bank to fail since the 2008 financial crisis on Friday as it tried to raise capital to offset fleeing deposits but lost $1.8 billion on Treasury bonds whose values were torpedoed by Fed rate hikes. (Reporting by Gokul Pisharody in Bengaluru; Editing by Lisa Shumaker)