Who Else Is Ready For The Banking Crash And Ensuing Bailouts?

[seanD]

The idea is just complete BS. No US regulatory body was going to claim SVB needed more capital to back the government bonds they were sitting on because they were too risky. And no one could have predicted a coordinated bank run, nor predicted what the Fed would do. The fact the Dems are pushing this and trying to blame Trump is proof alone it's a bunch of political malarkey.

[seanD]

If any skirting of regulation had anything to do with this (and it probably didn't), it was because they were a bunch of woke suck-ups to ESG that influenced regulation leniency.

Just as I had suspected. If this had anything to do with lax risk standards, it was related to ESG. This is why regulation won't work when companies can get ESG favoritism by hiding behind wokeism...

Top Audit Firm Defends Giving Clean Bill of Health to SVB, Signature Bank Weeks Before Failure

Audit giant KPMG is standing by its audits of Silicon Valley Bank (SVB) and Signature Bank, which collapsed when customers rushed to withdraw their savings in panic-fueled bank runs.

The two banks failed not long after their respective annual reports were certified by KPMG, one of the so-called “Big Four” accounting firms, a list that also includes Deloitte, Ernst & Young, and PricewaterhouseCoopers.

Paul Knopp, CEO of KPMG’s U.S. operations, defended the firm’s audit work on SVB and Signature in an interview with Financial Times during a Tuesday event at the NYU Stern Center for Sustainable Business.

He pointed to “market-driven events” and “unpredictable” customer reactions to such events as examples of factors behind bank failures that audit work is powerless to address.

“As we take into account everything we know today … we stand behind the reports we issued and we think we followed all professional standards,” Knopp told the outlet.

Knopp insisted that KPMG “absolutely” considered all the facts that were known up until the day the audits were issued, adding that it’s impossible to know with certainty what will happen after the reports are released.

He didn’t go into the specifics of the causes of the twin bank failures, speaking only in general terms about “actions” and “reactions” in the context of bank runs.

The SVB collapse came as depositors rushed for the exits as word spread that the bank had booked huge losses on its bond portfolios, which eroded in value due to rising interest rates.

Signature’s failure came as panic spread from the collapse of SVB and as Signature’s connections with the crypto space seemed to spook depositors, who rushed to withdraw their money.

Both banks had above average amounts of uninsured deposits, meaning amounts above the Federal Deposit Insurance Corporation’s (FDIC) deposit guarantee of $250,000 per depositor per account category. Uninsured amounts are subject to losses in case of bank failure.
‘Going Concern’ Warnings

KPMG signed its audit of SVB on Feb. 24, two weeks before the bank failed. The Signature audit was signed off on by KMPG on March 1, a little over a week before its collapse.

Questions have been raised as to why neither of KPMG’s two audits included a so-called “going concern” warning, which would be a requirement if the audit firm had substantial doubt as to whether the banks could survive over the next 12 months.

KPMG did not immediately respond to a request for comment by The Epoch Times nor to a question about why the two audits didn’t include such a warning.

Experts say it’s likely that KPMG will face regulatory scrutiny over the audits.

“Common sense tells you that an auditor issuing a clean report, a clean bill of health, on the 16th-largest bank in the United States that within two weeks fails without any warning, is trouble for the auditor,” Lynn Turner, former chief accountant of the Securities and Exchange Commission(SEC), said in remarks to the Wall Street Journal.

When you explore KPMG's website, you see they're all about ESG and woke. Btw, US government regulatory agencies are also fully on board the ESG train.

[Diogenes]

Just as I had suspected. If this had anything to do with lax risk standards, it was related to ESG. This is why regulation won't work when companies can get ESG favoritism by hiding behind wokeism...

Top Audit Firm Defends Giving Clean Bill of Health to SVB, Signature Bank Weeks Before Failure

Audit giant KPMG is standing by its audits of Silicon Valley Bank (SVB) and Signature Bank, which collapsed when customers rushed to withdraw their savings in panic-fueled bank runs.

The two banks failed not long after their respective annual reports were certified by KPMG, one of the so-called “Big Four” accounting firms, a list that also includes Deloitte, Ernst & Young, and PricewaterhouseCoopers.

Paul Knopp, CEO of KPMG’s U.S. operations, defended the firm’s audit work on SVB and Signature in an interview with Financial Times during a Tuesday event at the NYU Stern Center for Sustainable Business.

He pointed to “market-driven events” and “unpredictable” customer reactions to such events as examples of factors behind bank failures that audit work is powerless to address.

“As we take into account everything we know today … we stand behind the reports we issued and we think we followed all professional standards,” Knopp told the outlet.

Knopp insisted that KPMG “absolutely” considered all the facts that were known up until the day the audits were issued, adding that it’s impossible to know with certainty what will happen after the reports are released.

He didn’t go into the specifics of the causes of the twin bank failures, speaking only in general terms about “actions” and “reactions” in the context of bank runs.

The SVB collapse came as depositors rushed for the exits as word spread that the bank had booked huge losses on its bond portfolios, which eroded in value due to rising interest rates.

Signature’s failure came as panic spread from the collapse of SVB and as Signature’s connections with the crypto space seemed to spook depositors, who rushed to withdraw their money.

Both banks had above average amounts of uninsured deposits, meaning amounts above the Federal Deposit Insurance Corporation’s (FDIC) deposit guarantee of $250,000 per depositor per account category. Uninsured amounts are subject to losses in case of bank failure.
‘Going Concern’ Warnings

KPMG signed its audit of SVB on Feb. 24, two weeks before the bank failed. The Signature audit was signed off on by KMPG on March 1, a little over a week before its collapse.

Questions have been raised as to why neither of KPMG’s two audits included a so-called “going concern” warning, which would be a requirement if the audit firm had substantial doubt as to whether the banks could survive over the next 12 months.

KPMG did not immediately respond to a request for comment by The Epoch Times nor to a question about why the two audits didn’t include such a warning.

Experts say it’s likely that KPMG will face regulatory scrutiny over the audits.

“Common sense tells you that an auditor issuing a clean report, a clean bill of health, on the 16th-largest bank in the United States that within two weeks fails without any warning, is trouble for the auditor,” Lynn Turner, former chief accountant of the Securities and Exchange Commission(SEC), said in remarks to the Wall Street Journal.

When you explore KPMG's website, you see they're all about ESG and woke. Btw, US government regulatory agencies are also fully on board the ESG train.

I'm sure our resident Bernie Bro will deny the existence of the ESG push in regard to investing and the say it has nothing to do with the failure and that it's all a conspiracy.

[CivilDiscourse]

Here's my take. All those people NOW blaming Trump for this. Why didn't they try to fix it before hand? If these de-regulations were so bad, why didn't Bernie introduce legislation to fix it? Why didn't Warren? Same with the Train Regs....why didn't Biden's admin reverse that deregulation if they thought it was bad? They could have easily ATTEMPTED to fix these issues anytime in the past two years, but have not even tried.

Officer, I had my car for two years, but the last guy who owned it wore the brakes down. It's his fault I rear-ended the car in front of me, not mine.

Seems Starlight doesn't care to answer.

[rogue06]

He'd have an excuse if a bill was introduced but failed a vote. He can't make congress pass legislation, but fir dems to not have tried given how bad they said things were is inexcusable.

Biden, much like Obama, shows he doesn't really care if a bill is proposed or passed as long as they have a pen and phone they'll just sign executive orders that they will frankly acknowledge are illegal but simply don't care.

[Starlight]

Here's my take. All those people NOW blaming Trump for this.

The more that's coming out about this, the more they seem right to do so. It appears it was precisely Trump's 2018 deregulation that was the key thing that allowed this to happen in the first place. It seems pretty clear now that had that not passed, this would not have occurred.

Trump deregulated the trains. Now we've had a giant train derailment.
Trump deregulated the banks. Now we've had serious bank failures.

Tucker Carlson appears to have been right in saying Trump destroys everything he touches and is the master of failing at business and breaking things.

Why didn't they try to fix it before hand? If these de-regulations were so bad, why didn't Bernie introduce legislation to fix it? Why didn't Warren?

In the first two years of Biden's Presidency, the Dems had only a 1-vote majority in the Senate. Bernie and Warren were in the Senate when the deregulation passed with 100% of the Republicans voting for it and a handful of Dems. So both of them would be aware that the votes weren't available to correct the situation, because if 100% of Republicans voted against the re-regulation and 95% of Dems voted for it, it wouldn't pass.

So your question amounts to "why didn't they waste more time virtue-signaling on issues that would never pass rather than bringing forward legislation that had a serious shot of passing?" I kind of think that question answers itself. Also in Biden's first 2 years, Bernie was pretty seriously tied up in fight to pass a version of Biden's Build Back Better policy.

Same with the Train Regs....why didn't Biden's admin reverse that deregulation if they thought it was bad?

There's indeed some reasonable blame there. If I had been in Pete's position, for example, on day 1 I'd have said to my team "get me a list of all the changes Trump's people made over the past 4 years, and I'll want to have in-depth meetings on whether we should repeal those changes." Pete, however, is infamously big-business-friendly and lax on regulations, so it's in his defective character not to do that.

Officer, I had my car for two years, but the last guy who owned it wore the brakes down. It's his fault I rear-ended the car in front of me, not mine.

There are enough different laws and regulations that it's impossible to review all of them all of the time, so unless you specifically have a review of what the previous administration did and review those decisions, it's easy to assume that all's well. Secretaries who come into the office with their own topics of interest are often going to want to focus on those and explore regulations on those topics, rather than assuming they ought to start by undoing stuff done previously. It's a mistake, but it's an easy mistake to make.

[Starlight]

Seems Starlight doesn't care to answer.

I was busy for a couple of days, get over yourself, it's not like you were making good or unanswerable points.