(Bloomberg) -- US regulators are considering retaining securities owned by Signature Bank and Silicon Valley Bank that sank in value as interest rates rose, eliminating one obstacle to a potential sale of the two lenders.

The arrangement — typical when the Federal Deposit Insurance Corp. seizes a bank — could help pave the way for takeovers made more difficult by the declining value of the assets, according to people familiar with the matter who asked not to be identified discussing confidential talks.

The amount covered at Signature could range from $20 billion to $50 billion, while for Silicon Valley Bank it could be between $60 billion and $120 billion, the people said.

A representative for the FDIC declined to comment.

Silicon Valley Bank and Signature both invested in bonds with low interest rates, which slumped in value as the Federal Reserve raised borrowing costs over the past year to battle a surge in inflation. 

Silicon Valley Bank was forced to start selling assets at steep losses when depositors began withdrawing money, leading to its collapse last week.

The lender had mark-to-market losses in excess of $15 billion at the end of 2022 for securities held to maturity, almost equivalent to its entire equity base of $16.2 billion. Regulators flagged the problem to the bank late last year, telling it to improve how it tracked interest-rate risk, Bloomberg News has reported.

©2023 Bloomberg L.P.