Browsing Tag

SVB

14 posts

Silicon Valley Bank subsidiary sold to management team

SVB Securities, a healthcare investment firm, will be bought out by its management team from parent company Silicon Valley Bank after a competitive bidding process, with support from The Baupost Group. The deal is subject to regulatory approval and court confirmation. Silicon Valley Bank faced financial turmoil in March.

Former SVB head draws outrage at hearing on US bank failures

Executives from failed US banks faced intense scrutiny as senators criticized their risk management practices and excessive executive pay. Former Silicon Valley Bank CEO Gregory Becker defended the bank’s management but attributed its downfall to unforeseen events. The poor management of both Silicon Valley Bank and Signature Bank was highlighted in government reports. Senators questioned the executives’ decisions and compensation, emphasizing the need for accountability and legislation to reclaim pay from bankers involved in bank failures.

Ex SVB head says social media ‘fueled’ run on doomed bank

Silicon Valley Bank’s former CEO, Gregory Becker, testified that the bank’s collapse was caused by a social media-driven bank run and external factors like the Federal Reserve’s sudden monetary policy shift. He defended the bank’s risk management practices and attributed its demise to rumors and misconceptions sparked by the failure of another bank. Becker will face questioning from the Senate Banking Committee. SVB’s downfall involved selling assets at a loss due to a deposit flight, triggered partly by online rumors. The bank’s heavy investment in government-backed securities and lack of a robust hedging strategy exacerbated its losses when interest rates rose.

US authorities probe Goldman Sachs over Silicon Valley Bank collapse

Goldman Sachs is being investigated by US authorities over its work for Silicon Valley Bank (SVB) in connection with the events surrounding the California bank’s collapse, according to a securities filing. Goldman has been criticized over its multiple roles with SVB, in which it was both advising the bank and purchasing distressed debt in a deal that ultimately played a central role in SVB’s collapse.

First Republic bank in limbo as shares fall further

First Republic Bank’s shares plummeted by 43% on Friday, after experiencing a massive drop in deposits. Its value has dropped from US$40bn to US$654m, with experts speculating that the most likely scenarios include the sale of the bank or its assets to other financial players, following a receivership by the FDIC. However, the negative value of First Republic’s loans could cause a loss in value for prospective buyers. Meanwhile, former FDIC Chair Sheila Blair is worried that not protecting uninsured deposits could surprise people and be disruptive.

US senators slam regulators for SVB oversight failures

US lawmakers accused regulators of failing to prevent the collapse of Silicon Valley Bank, which sparked a broader sell-off of banking stocks. The Senate Banking Committee grilled senior Federal Reserve, Treasury and Federal Deposit Insurance Corporation officials about their inability to prevent the Californian lender’s collapse on 10 March, with regulators promising to investigate any failings they may have made in their oversight of SVB.

First Citizens to acquire collapsed Silicon Valley Bank

First Citizens Bank to acquire deposits and loans of bankrupt Silicon Valley Bank, covering $119 billion in deposits and $72 billion in assets. SVB’s 17 branches will open as First Citizens on Monday, and depositors will automatically become depositors of First Citizens Bank, insured by the FDIC.

US regulator sells failed Signature Bank assets to another lender

Flagstar Bank will take over deposits and some loan portfolios of failed Signature Bank, according to the Federal Deposit Insurance Corporation. The bank’s 40 branches will open under Flagstar on Monday, but $60 billion in loans and $4 billion in deposits related to Signature Bank’s digital banking business will remain under the regulator’s control. Meanwhile, the FDIC is seeking to sell the failed Silicon Valley Bank in at least two parts after a massive wave of withdrawals from the bank sparked fears of contagion across the industry.

Crypto-linked bank failures fuel regulation debate

Regulators are rushing to protect consumers from fraud and scams in the global cryptocurrency industry, which has been hit hard by setbacks, scandals, and high-profile failures. The industry has boomed during the pandemic, but customers often invest without realizing they are investing in unregulated and illegal assets. Regulators are concerned about the conflicts of interest of trading platforms and the complex and volatile nature of cryptocurrencies. Officials in the US and Europe are working on frameworks to oversee crypto firms and increase transparency in their operations.

SVB’s demise: Why didn’t US bank regulators see it coming?

The collapse of Silicon Valley Bank highlights the inadequacy of regulatory reforms since the 2008 financial crisis, according to banking experts. The bank’s disproportionate exposure to tech startups, coupled with its rapid growth and vulnerable long-date fixed-interest bonds, were clear potential red flags that regulators missed. Experts point to the easing of US laws enacted after the crisis, which puts more pressure on old-fashioned supervision, as a contributing factor to the oversight failure. The Federal Reserve has announced plans to review the supervision of SVB, and President Joe Biden has promised a “full accounting” of the situation.