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Goldman’s Role in Failed SVB Deal Under Review in US Probe

Bloomberg (alternative free link)

  • sold portfolio to Goldman at a loss, sought firm’s help
  • Bank’s failure helped push regional lenders into turmoil

“Goldman Sachs Group Inc.’s role in Silicon Valley Bank’s attempt to raise funds in March is under review by US governmental agencies, which are looking into the failed transaction that helped push the US regional-banking system into turmoil.The Wall Street titan is cooperating and providing information to the government in connection with their investigations and inquiries into Silicon Valley bank, including the role the firm played with the now-failed bank in March, according to a regulatory filing. SVB offloaded a $24 billion portfolio to Goldman at a loss and sought the firm’s help in raising more than $2.2 billion to cover the shortfall, according to disclosures in March. Goldman couldn’t pull off the deal and a bank run in the wake of that offering effectively doomed SVB. What started off as troubles at a niche bank catering to the Silicon Valley tech industry quickly snowballed into a pile of worries for regional banks as investors questioned their stability. The reverberations echoed in Europe, sparking a renewed slump in Credit Suisse Group AG share prices, which resulted in a hastily arrange marriage with cross-town rival UBS Group AG orchestrated by the Swiss government. A representative for Goldman Sachs declined to comment…”

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