Good morning. The Federal Reserve is actively considering closing a loophole that allows some midsize banks to effectively mask losses on securities they hold, a contributing factor in the collapse of Silicon Valley Bank.

• The plan: Led by vice chair for supervision Michael Barr, the Fed is considering ending an exemption that allows some banks to boost the amount of capital they report for regulatory purposes, according to people familiar with the matter. Capital is the buffer banks are required to hold to absorb potential losses.
   
• The reason: Regulators are weighing the change after the sudden collapses last month of SVB and Signature Bank rattled the financial system. If adopted, it would reverse a loosening of rules by the Fed in 2019 and heighten oversight of midsize banks by extending restrictions that currently only apply to the largest, most complex firms.
   
• To whom would this apply to and when? All told, regulators are considering extending toughened restrictions to about 30 companies with between $100 billion and $700 billion in assets, the people said. A proposal could come as soon as this summer, and any changes would be phased in, potentially over a couple of years. 
   
• Possible targets: Regional banks such as U.S. Bancorp, PNC Financial Services Group Inc., Truist Financial Corp. and Capital One Financial Corp. could be affected, and could be made to bolster capital.

The Risk & Compliance Forum on May 9 will feature speakers including Glenn Leon, chief of the fraud section at the Justice Department, Assistant Secretary for Export Enforcement Matthew Axelrod, Elizabeth Atlee, chief ethics & compliance officer at CBRE and Sidney Majalya, chief risk officer at Binance.US. You can register here.

JPMorgan’s ties to Jeffrey Epstein were deeper than the bank Has acknowledged.

JPMorgan Chase & Co. had ties to Jeffrey Epstein that ran deeper than the bank has acknowledged and extended years beyond when it decided to close the convicted sex offender’s accounts, according to people familiar with the matter.

KYC issues. The new details show that JPMorgan was treating Epstein like a star client after his first conviction and despite repeated warnings from its own employees. And after JPMorgan closed Epstein’s accounts, bankers kept meeting with him for years.

Biden administration considers tougher regulation of money-market, hedge funds.

The Biden administration is moving to make it easier to more closely regulate nonbank financial institutions such as hedge funds and money-market funds, proposing a rollback of Trump-era procedures.

Reversing Trump-era policy. A group of top federal regulators on Friday proposed changing the way it designates nonbanks as systemically important. That label currently only applies to the nations’ largest banks and allows extra oversight from the Federal Reserve.

• Lawyers for crypto entrepreneur Do Kwon asked a judge to throw out a U.S. regulator’s lawsuit accusing him of fraud in connection with last year’s $40 billion collapse of the TerraUSD and Luna cryptocurrencies.
   
• Backers of so-called decentralized finance say their peer-to-peer cryptocurrency platforms eliminate both human intermediaries and the need for government oversight. Regulators’ response: Not so fast.
   
• Many of the economic restrictions against Russia  have proven less costly so far to Russia than some economists had expected and many officials in Washington and Brussels had hoped. Now, a group of Harvard economists are proposing ways to impose better sanctions.
   
• The Environmental Protection Agency is preparing to issue new rules that would slash the amount of planet-warming greenhouse gases produced by U.S. power plants in the coming decades, according to people familiar with the matter.

China’s ambassador to France says ex-Soviet states lack basis for sovereignty.

France and countries across Eastern Europe condemned remarks by China’s ambassador in Paris claiming that post-Soviet states lack a firm basis for their sovereignty under international law.

Ambassador Lu Shaye made the comments during an interview late Friday on French TV, in which he was asked whether he considered the peninsula of Crimea, which was annexed by Russia in 2014, part of Ukraine under international law.

• Ukraine’s armed forces are preparing for one of the most daunting undertakings any military can attempt: dislodging an entrenched enemy.
   
• The U.S. and other governments moved swiftly over the weekend to evacuate embassy staff from Sudan.
   
• Moody’s Investors Service downgraded 11 regional lenders Friday, suggesting higher interest rates and recent bank failures have ushered in greater instability.
   
• Across the West, owners of homes and commercial buildings are taking stock of some of the most widespread structural damage from heavy snow in years.
   
• In the span of 24 hours this past week, Elon Musk made three very big bets with three very different companies, together showing his penchant to plow ahead despite sizable risks.

• NBCUniversal Chief Executive Jeff Shell is departing, effective immediately, after an investigation into a complaint of inappropriate conduct, parent company Comcast Corp. said Sunday.
   
• Bed Bath & Beyond Inc. filed for bankruptcy protection to wind down its business after years of losses and failed turnaround plans left the once-powerful retailer short of cash.
   
• Johnson & Johnson is poised to begin a roadshow to pitch shares of its consumer-healthcare business, the producer of household names such as Tylenol.
   
• First Republic Bank is scheduled to report first-quarter earnings Monday. The results will give investors insight into the extent of the damage after sharp deposit outflows at the troubled bank.
   
• It wasn’t the plan, but MillerKnoll Chief Executive Andi Owen passed on a crucial lesson to bosses everywhere this week: Zoom calls are a tricky venue for giving tough love to staff.
   
• How the U.S. government clears personnel to see and share its secrets is coming under new pressure after the alleged leak of classified information by Air National Guardsman Jack Teixeira, according to federal reviews of the process and lawmakers.

WSJ Pro Private Equity is launching our latest annual survey of secondary market buyers. Now in its ninth year, our annual report on secondary buyers dives deep into a range of issues that shape secondary transactions, including pricing, deal structures, use of leverage and so much more. If you are a secondary investor you can access the survey at this link.