Banks averting bond losses with accounting twist

JPMorgan Chase & Co. and Wells Fargo & Co. are leading a shift in how banks account for their bond investments after a $44 billion plunge in value exposed a potential drain on capital under new rules.

The largest U.S. lenders are moving assets into the “held-to-maturity” column of their books instead of designating them as “available for sale,” an accounting method that under post-crisis banking regulations allows paper losses to erode measures of their health. The change pushed the share of securities that the five biggest banks keep in the held-to-maturity category to 8.4 percent, the highest in almost two decades, according to Credit Suisse Group AG analysts.