Source: Zhitong Finance
Author: Ma Huomin
Wall Street giants, according to a regulatory document$Goldman Sachs (GS.US)$It is cooperating with the US government$SVB Financial (SIVBQ.US)$An investigation into the bankruptcy incident and provided information to the government, including the company's role in Silicon Valley Bank's March financing.
According to a report disclosed in March, Silicon Valley Bank sold a portfolio of 24 billion US dollars to Goldman Sachs at a loss and sought help from Goldman Sachs to raise more than 2.2 billion US dollars to make up for the deficit. Goldman Sachs was unable to complete the deal, and the rush caused by selling assets at a loss caused the Bank of Silicon Valley to go out of business. As the panic spread, regional banks in the US plummeted. This caused repercussions in Europe, causing Credit Suisse's stock price to plummet, and later, Credit Suisse hurriedly reached a merger deal with UBS Group under the coordination of the Swiss government.
California lawmakers have been pushing for a federal investigation into Goldman Sachs's role in the Silicon Valley bank bankruptcy. Twenty Democratic congressmen, led by Senate candidate Adam Schiff, asked the US Department of Justice, the Securities and Exchange Commission, and the Federal Deposit Insurance Corporation to include Goldman Sachs in their initial investigation.
Goldman Sachs's role
The Bank of Silicon Valley's collapse began with the risk that its credit rating would be downgraded by Moody's, which could push it to the brink of junk bonds. In response, the Bank of Silicon Valley hired Goldman Sachs to help it raise fresh capital. Goldman Sachs has bought most of Silicon Valley Bank's portfolio and plans to transfer these assets. Silicon Valley banks lost about $1.8 billion, while Goldman Sachs could earn commissions by selling their portfolios back to the market at a higher price.
Then, on March 8, Goldman Sachs presented a plan to investors to help close this loophole by raising $2.25 billion from General Atlantic and other investors.
Other banks and investors blamed Goldman Sachs for failing to raise capital early, causing the market to panic.
Customers are concerned about the financial situation of the Bank of Silicon Valley and are taking their deposits from the bank one after another. On March 9, customers tried to withdraw 42 billion US dollars of deposits from the Bank of Silicon Valley, accounting for about a quarter of the bank's year-end deposits.
The growing chaos forced Goldman Sachs to put the offering on hold, and then US regulators took over Silicon Valley Bank, which was the second largest bank failure in US history at the time. Earlier this week,$First Republic Bank (FRCB.US)$It was taken over and became the second largest bank failure in the new history of the United States.
Editor/jayden