As the industry drives toward greater compliance, banks will scrutinize agreed-on covenants and reporting requirements.
If the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank illustrate anything, it’s the fragility of trust that both bank customers and regulators are experiencing as a result of downturn fears. While a new era of regulatory scrutiny was dawning well before the collapse of SVB and Signature Bank in March, these incidents brought into sharp focus the impact of rising interest rates and economic slowdown on banks and their customers from a risk perspective.
As the industry drives toward greater compliance, banks will scrutinize agreed-on covenants and reporting requirements. Therefore, filing for exceptions on financial statements could bring your clients oversight ramifications and put their bank relationships at risk.
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