SEC Delays Decision on Spot Bitcoin ETF Proposal

SVB Financial Group Sells Securities Division to Its Current Chief Executive

by Damian Chmiel
  • Another part of the fallen SVB will be successfully acquired.
  • The new entity will be rebranded to Leerink Partners.
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SVB Financial Group, the parent company of the now-defunct Silicon Valley Bank (SVB), announced yesterday (Sunday) the sale of its division responsible for investment banking. SVB Securities will be acquired by a group led by Jeff Leerink, using funds sourced from The Baupost Group.

SVB Sells Securities Business

Leerink, the Chief Executive of SVB Securities, is set to take over the investment banking operations in exchange for cash, a 5% equity instrument, and the repayment of an intercompany note. The insolvent lender stated that its research department, MoffettNathanson LLC, is not included in the transaction and will remain a part of the SVB Financial Group.

The transaction was made several months after the Federal Deposit Insurance Corporation (FDIC) took over SVB amidst a liquidity crisis. Depositors panicked and withdrew their funds during a bank run, which slashed more than half of the market value of several local financial institutions in the United States. Although the problems were quickly contained, it was still the biggest banking crisis since 2008.

First Citizens BancShares Inc. opted to acquire all deposits and loans of SVB, but $90 billion in securities remained in the hands of the FDIC that are awaiting to be sold. The lender is considering what to do with another investment division, SVB Capital.

Despite US authorities claiming that the crisis among local banks was efficiently managed and would have no systemic consequences, it sent ripples across the globe. The crisis worsened the situation for Credit Suisse, which was already having problems. It almost went bankrupt but was finally bought by its rival, UBS.

New Bank in the UK and G20 Investigation

SVB was also given a fresh start in the United Kingdom, thanks to HSBC. HSBC announced the launch of its HSBC Innovation Banking division last week, integrating the formerly independent Silicon Valley Bank UK (SVB UK) and initiating dedicated innovation teams in the US, Hong Kong, and Israel.

In March, HSBC purchased the British segment of the now-defunct SVB for just a single pound. This acquisition came shortly after US authorities mandated the institution to halt all further operations.

Although the issues involving Silicon Valley Bank (SVB) and Credit Suisse (CS) appear to have been settled, regulators are not yet prepared to lessen their grip on the banking sector. Klaas Knot, the Chairman of the G20's Financial Stability Board, declared three weeks ago that a comprehensive review of all of the situations involving SVB, CS and the overall industry will be conducted.

"This is not just a European issue; it's a problem in other parts of the world as well. Supervision on our side has clearly fared better than on the other side of the Atlantic," Knot commented during an event organized by the European Banking Federation.

The complications associated with SVB and numerous other American banks resulted in the takeover of Credit Suisse in Europe and a temporary crash of the stock prices of financial companies worldwide.

SVB Financial Group, the parent company of the now-defunct Silicon Valley Bank (SVB), announced yesterday (Sunday) the sale of its division responsible for investment banking. SVB Securities will be acquired by a group led by Jeff Leerink, using funds sourced from The Baupost Group.

SVB Sells Securities Business

Leerink, the Chief Executive of SVB Securities, is set to take over the investment banking operations in exchange for cash, a 5% equity instrument, and the repayment of an intercompany note. The insolvent lender stated that its research department, MoffettNathanson LLC, is not included in the transaction and will remain a part of the SVB Financial Group.

The transaction was made several months after the Federal Deposit Insurance Corporation (FDIC) took over SVB amidst a liquidity crisis. Depositors panicked and withdrew their funds during a bank run, which slashed more than half of the market value of several local financial institutions in the United States. Although the problems were quickly contained, it was still the biggest banking crisis since 2008.

First Citizens BancShares Inc. opted to acquire all deposits and loans of SVB, but $90 billion in securities remained in the hands of the FDIC that are awaiting to be sold. The lender is considering what to do with another investment division, SVB Capital.

Despite US authorities claiming that the crisis among local banks was efficiently managed and would have no systemic consequences, it sent ripples across the globe. The crisis worsened the situation for Credit Suisse, which was already having problems. It almost went bankrupt but was finally bought by its rival, UBS.

New Bank in the UK and G20 Investigation

SVB was also given a fresh start in the United Kingdom, thanks to HSBC. HSBC announced the launch of its HSBC Innovation Banking division last week, integrating the formerly independent Silicon Valley Bank UK (SVB UK) and initiating dedicated innovation teams in the US, Hong Kong, and Israel.

In March, HSBC purchased the British segment of the now-defunct SVB for just a single pound. This acquisition came shortly after US authorities mandated the institution to halt all further operations.

Although the issues involving Silicon Valley Bank (SVB) and Credit Suisse (CS) appear to have been settled, regulators are not yet prepared to lessen their grip on the banking sector. Klaas Knot, the Chairman of the G20's Financial Stability Board, declared three weeks ago that a comprehensive review of all of the situations involving SVB, CS and the overall industry will be conducted.

"This is not just a European issue; it's a problem in other parts of the world as well. Supervision on our side has clearly fared better than on the other side of the Atlantic," Knot commented during an event organized by the European Banking Federation.

The complications associated with SVB and numerous other American banks resulted in the takeover of Credit Suisse in Europe and a temporary crash of the stock prices of financial companies worldwide.

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