6 votes

KPMG gave SVB, Signature Bank clean bill of health weeks before collapse. Accounting firm faces scrutiny for audits of failed banks.

Posted by cfabbro
Tags: banking, usa, banks, accounting, audits, kpmg, silicon valley bank, signature bank, first republic bank, public company accounting oversight board, securities and exchange commission, author.jonathan weil, author.jean eaglesham, source.the wall street journal, paywall
https://www.wsj.com/articles/kpmg-faces-scrutiny-for-audits-of-svb-and-signature-bank-42dc49dd

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Authors
Jonathan Weil and Jean Eaglesham
Published
Mar 13 2023
Word count
56 words

2 comments

  1. [2]
    rkcr
    Link
    My basic understanding of why SVB actually failed was that it had a gigantic bank run. Would any bank be able to withstand people withdrawing 25% of their deposits in a single day? If people knew...

    My basic understanding of why SVB actually failed was that it had a gigantic bank run. Would any bank be able to withstand people withdrawing 25% of their deposits in a single day?

    If people knew last week what we know now (that their deposits were all safe), there never would've been a run, and SVB would still be okay (and possibly could've dug itself out of its current hole).

    4 votes
    1. stu2b50
      Link Parent
      They can be. Just a few months ago SVB would've been able to withstand people withdrawing 25% of their deposits in a single day, since the gap between their assets at cost and at fair market value...

      Would any bank be able to withstand people withdrawing 25% of their deposits in a single day?

      They can be. Just a few months ago SVB would've been able to withstand people withdrawing 25% of their deposits in a single day, since the gap between their assets at cost and at fair market value wasn't as large.

      If people knew last week what we know now (that their deposits were all safe), there never would've been a run, and SVB would still be okay (and possibly could've dug itself out of its current hole).

      Yep. I mean, if there wasn't a bank run they wouldn't be a in a hole. They had more assets than liabilities at cost, just not mark-to-market. If they were "allowed" to hold their bonds to maturity they'd have more money than deposits.

      4 votes