US frees up billions for banks while quietly admitting SVB’s core failure never went away

Washington is in a generous mood with its banks. In March, federal regulators unveiled a sweeping overhaul of capital requirements (the financial cushions that banks must hold to absorb losses in hard times), and the headlines wrote themselves: deregulation, relief, billions freed up for lending and buybacks. The proposal would cut the required capital for the largest Wall Street firms by nearly 5%. The Federal Reser…