DoJ and SEC join Fed in examining the SVB's crisis.
Investigations include reviewing SVB Financial executives' shares sales before the collapse.
After the
US Federal Reserve (Fed) declared an internal probe following the collapse of Silicon
Valley Bank (SVB) last week, two more US government bodies want to scrutinize
the causes of the run on the institution's deposits that put it on the brink of
bankruptcy, as stated in The Wall Street Journal (WSJ) report.
SEC and DoJ to Investigate
Silicon Valley Bank Collapse
The
Securities and Exchange Commission (SEC) and the Justice Department (DoJ) have
launched investigations into SVB. According to people familiar with the matter
who wished to remain anonymous, the inspections are in the preliminary stages
and may not necessarily lead to charges.
Conducting
such investigations are often practiced when large financial institutions face
sudden liquidity problems. For example, the purpose of the SEC's and DoJ's probes
may be to identify issues that have arisen at SVB to ensure that they will not
be repeated in the future.
Additionally,
the ongoing investigations are looking into stock sales made by officers of
SVB Financial shortly before the bank's failure. According to the sources, the
Justice Department's fraud prosecutors in both Washington and San Francisco are
involved in the probe.
Shares of SVB Financial, the former owner of SVB, plunged more than 60% during Thursday's session. Thus, the stock exchange decided to halt their quotes due to the increased volatility on Wall Street since Friday.
The dynamic fall
stopped at $106 per share, well below the pandemic 2020 low, testing levels
last seen in 2016. In the
aftermath, the share price of local First Republic Bank also slumped over 60% and Credit Suisse stocks reached a new all-time low. However, Tuesday’s session
brought a visible rebound and a bullish correction of banking shares.
Earlier on
Tuesday, Finance Magnates reported that the Fed had launched its own
internal investigation into the collapse of the SVB. Michael S. Barr, the Vice
Chair for Supervision at the central bank, and his team will review how SVB was
regulated and supervised by Fed before its collapse in search of potential
negligence that could explain the reasons for the sudden bankruptcy of the
institution. The final results will be released to the public by 1 May 2023.
What
Happened at Silicon Valley Bank?
Silicon
Valley Bank was established in 1983 to cater to the banking needs of the tech
industry in Silicon Valley. It quickly became one of the largest banking institutions
in the US, offering a variety of products, such as deposit services, loans,
investment products, cash management, and commercial finance.
The bank
saw a significant increase in deposits, reaching $198 billion by the end of the
first quarter of 2022, which was three times more than it had at the end of
2019. This growth was primarily due to the bank's close-knit customer base in
the tech industry. SVB invested in 5-year bonds and 10-year mortgage-backed
securities, generating a fixed return of about 1.5%. However, these investments
turned sour when interest rates increased, and the bank failed to manage its
risks.
The bank's
problems worsened when some of its customers started withdrawing their
deposits, leading to a feedback loop that caused a significant drop in deposits
from $198 billion in March 2022 to $165 billion in February 2023, which is a decrease of
16%. This bank run ultimately led to the SVB's failure. The previous Chief Risk
Officer left in April 2022 and was replaced in January 2023, but it was too
late to save the bank.
After the
US Federal Reserve (Fed) declared an internal probe following the collapse of Silicon
Valley Bank (SVB) last week, two more US government bodies want to scrutinize
the causes of the run on the institution's deposits that put it on the brink of
bankruptcy, as stated in The Wall Street Journal (WSJ) report.
SEC and DoJ to Investigate
Silicon Valley Bank Collapse
The
Securities and Exchange Commission (SEC) and the Justice Department (DoJ) have
launched investigations into SVB. According to people familiar with the matter
who wished to remain anonymous, the inspections are in the preliminary stages
and may not necessarily lead to charges.
Conducting
such investigations are often practiced when large financial institutions face
sudden liquidity problems. For example, the purpose of the SEC's and DoJ's probes
may be to identify issues that have arisen at SVB to ensure that they will not
be repeated in the future.
Additionally,
the ongoing investigations are looking into stock sales made by officers of
SVB Financial shortly before the bank's failure. According to the sources, the
Justice Department's fraud prosecutors in both Washington and San Francisco are
involved in the probe.
Shares of SVB Financial, the former owner of SVB, plunged more than 60% during Thursday's session. Thus, the stock exchange decided to halt their quotes due to the increased volatility on Wall Street since Friday.
The dynamic fall
stopped at $106 per share, well below the pandemic 2020 low, testing levels
last seen in 2016. In the
aftermath, the share price of local First Republic Bank also slumped over 60% and Credit Suisse stocks reached a new all-time low. However, Tuesday’s session
brought a visible rebound and a bullish correction of banking shares.
Earlier on
Tuesday, Finance Magnates reported that the Fed had launched its own
internal investigation into the collapse of the SVB. Michael S. Barr, the Vice
Chair for Supervision at the central bank, and his team will review how SVB was
regulated and supervised by Fed before its collapse in search of potential
negligence that could explain the reasons for the sudden bankruptcy of the
institution. The final results will be released to the public by 1 May 2023.
What
Happened at Silicon Valley Bank?
Silicon
Valley Bank was established in 1983 to cater to the banking needs of the tech
industry in Silicon Valley. It quickly became one of the largest banking institutions
in the US, offering a variety of products, such as deposit services, loans,
investment products, cash management, and commercial finance.
The bank
saw a significant increase in deposits, reaching $198 billion by the end of the
first quarter of 2022, which was three times more than it had at the end of
2019. This growth was primarily due to the bank's close-knit customer base in
the tech industry. SVB invested in 5-year bonds and 10-year mortgage-backed
securities, generating a fixed return of about 1.5%. However, these investments
turned sour when interest rates increased, and the bank failed to manage its
risks.
The bank's
problems worsened when some of its customers started withdrawing their
deposits, leading to a feedback loop that caused a significant drop in deposits
from $198 billion in March 2022 to $165 billion in February 2023, which is a decrease of
16%. This bank run ultimately led to the SVB's failure. The previous Chief Risk
Officer left in April 2022 and was replaced in January 2023, but it was too
late to save the bank.
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
BGC Group Secures Backing from Global Banks for New $600M Trading Platform
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔