by Charlie Gasparino, senior correspondent for FOX Business, discusses Silicon Valley bank collapse and calls on Fed to suspend rate hikes for “Kennedy”.
Goldman Sachs was the buyer of the bond portfolio on which Silicon Valley Bank posted a $1.8 billion loss, which set in motion the collapse of SVB.
The SVB announced this on Tuesday.
The loss was the reason the tech-focused lender attempted a $2.25 billion stock sale with Goldman Sachs as adviser last week.
Fundraising failed as depositors fled and investors feared the SVB needed more capital.
SILICON VALLEY BANK COLLAPSE: HERE WHO BENEFITED FROM THEIR EXECUTIVE, PAC DONATIONS
In this photo illustration a Goldman Sachs Group logo seen displayed on a smartphone with a Goldman Sachs Group logo in the background. (Thiago Prudencio/SOPA Images/LightRocket via Getty Images/Getty Images)
The portfolio consisted primarily of US Treasuries and had a book value of $23.97 billion, SVB said.
The transaction was completed “at negotiated prices” and raised $21.45 billion in proceeds for the bank.
Goldman Sachs’ purchase of the bond portfolio was handled by a department separate from the unit handling SVB’s stock sale, according to a person familiar with the matter.
Customers wait outside a branch of Silicon Valley Bank in Wellesley, Massachusetts. (Sophie Park/Bloomberg via Getty Images/Getty Images)
Silicon Valley Bank made “one of the most fundamental mistakes in banking,” says Larry Summers
After 40 years, the US shut down Silicon Valley Bank, the country’s 17th largest bank FDIC Friday as regulators moved to protect customers as it faced a liquidity crisis after losing $2 billion.
It was the biggest bank failure since the financial crisis.
Signature bank logo displayed on a phone screen and cryptocurrency representation can be seen in this illustration photo. ((Photo by Jakub Porzycki/NurPhoto via Getty Images) / Getty Images)
SIGNATURE BANK WAS A CRIMINAL INVESTIGATION PRIOR TO THE FALL OF THE COMPANY
Federal regulators said Sunday the New York-based Signature Bank would also be shut down to protect consumers and the financial system after the collapse of the SVB.
| ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GS | THE GOLDMAN SACHS GROUP INC. | 321.88 | +5.73 | +1.81% |
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Founded in 2001 and based in New York, Signature Bank has been popular with crypto businesses. The institution provided deposit services for its customers’ digital assets, but did not issue loans secured by them.
Reuters contributed to this report.
