Reuters | , Posted via Singh Rahul Sunilkumar
SVB Financial Group mentioned on Tuesday that Goldman Sachs Group Inc used to be the acquirer of a bond portfolio on which it booked a $1.8 billion loss, a transaction that set in movement the failure of SVB.
The losses at the portfolio have been the explanation SVB, a technology-focused lender referred to as Silicon Valley Bank, tried a $2.25 billion inventory sale closing week the usage of Goldman Sachs as an marketing consultant. The capital lift used to be thwarted as depositors fled and buyers fretted SVB would have wanted much more capital.
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The portfolio SVB bought to Goldman Sachs on March 8 consisted most commonly of US Treasuries and had a guide price of $23.97 billion, SVB mentioned. The transaction used to be performed “at negotiated prices” and netted the financial institution $21.45 billion in proceeds, SVB added.
SVB was the biggest financial institution to fail for the reason that 2008 monetary disaster, and used to be taken over via US regulators on Friday.
Goldman Sachs’ acquire of the bond portfolio used to be treated via a department that used to be break free the unit that treated SVB’s inventory sale, in line with a supply accustomed to the topic.
Jacob Frenkel, chair of presidency investigations and securities enforcement observe on the regulation company Dickinson Wright, mentioned such preparations to care for conflicts of passion are conventional at primary banks.