The bankruptcy of Silicon Valley Bank once again calls into question the supervision of banks

The banking crisis that triggered bankruptcies Silvergate, signature and Silicon Valley Bank (SVB) directed all eyes towards those responsible for its supervision. Not just national authorities – US President Joe Biden accused his predecessor Donald Trump of making surveillance more flexible – but also companies tasked with auditing their accounts. Who put a magnifying glass on the balance sheets of bankrupt entities?

Consultant KPMG he was in charge of studying Silicon Valley Bank (SVB) and Signature Bank. The last revisions were made 14 and 11 days ago, respectively, as announced this Monday The Wall Street Journal.

These audits looked at the 2022 financial year, so KPMG could detect the risks that precipitated the crisis: the poor diversification of its portfolio, invested mainly in low-yielding 10-year government bonds.

Ongoing investigation and first lawsuits

SVB’s deposits peaked in the first quarter of 2022, and they fell by 13% in the last nine months of the year, Efe gathers. The period coincides with a sharp rise in interest rates set by the Federal Reserve, a maneuver that forced many savers to go to the bank to get their money to continue investing in their expenses and projects, draining coffers. In the current exercise, On March 8, KPMG revealed that clients were “burning money” to a high that “grew up further in February,” he said.

Possible KPMG errors will predictably be a part the investigation published by the Federal Reserve on its own supervision of SVBwith a planned publication date of May 1, and about the lawsuits that clients have started to file against the subject, of course “fraud”.

The consultant disclaims any responsibility for events subsequent to the last audit.

SVB announced last Wednesday that it was seeking a capital increase to plug the financial hole, prompting many depositors to request withdrawals of up to $42 billion in one day.

As a result, the authorities closed and intervened in the bank on Friday due to lack of liquidity.

Signature Bank, which has fewer assets than SVB, was also the victim of a “bank rush” last week and was seized by regulators on Sunday.

American authorities deployed that same day rescue program to protect the deposits of both entities, including unsecured deposits, and said customers could withdraw their money as early as Monday. The said fund will also support other banks that may have financial problems.

Fears of a financial crisis crushed bank prices around the world yesterday, with sharp declines such as First Republic Bank, which lost almost 62 percent of its value and whose accounts were also audited by KPMG.

He IBEX 35 The day ended in the red (-3.51%), under the pressure of its six banks, which eased their declines this Tuesday, although only the shares of Bankinter and Caixabank are in the green.

Losses in the selection are led by Repsol. Last Friday, the barrel of Brent was traded at 82.6 dollars, but this Tuesday it is already below the threshold of 80 dollars.