Justice Department, SEC Investigating Silicon Valley Bank Collapse

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Procedure is common when there are large losses in the US financial market and does not necessarily lead to any formal accusation. Silicon Valley Bank, bank financing startups, collapses in the US Reuters The Department of Justice and the SEC (US Securities and Exchange Commission) are investigating the collapse of Silicon Valley Bank, according to sources familiar with the matter heard by American newspapers such as “The Wall Street Journal” and “The New York Times”. The bank collapsed last week after its customers rushed to withdraw money. The separate investigations are in their preliminary stages and may not lead to accusations or allegations of wrongdoing. US prosecutors and regulators often open investigations after financial institutions or public companies suffer large, unexpected losses. Shares in SVB Financial Group, which owned the bank, have fallen 60% in the past week and have not been traded on the stock exchange since Friday. Investigations are also expected to examine stock sales that SVB Financial Group directors made days before the bank’s failure, sources told The Wall Street Journal. The Justice Department investigation involves the department’s fraud prosecutors in Washington and San Francisco. Fight against inflation US closes second bank and announces measures to avoid crisis in sector The dramatic collapse of Silicon Valley Bank and the market turmoil it unleashed are part of the “battle between fire and ice” in global efforts to contain years of easy money, Morgan Stanley co-chairman Ted Pick said on Tuesday. Sharp increases in interest rates by the Federal Reserve and other central banks to combat rising consumer prices have inevitably led to bouts of stress, Pick said at the Morgan Stanley European Financials Conference, adding that US banks SVB and Signature Bank have fallen victim. of these circumstances. “This is part of turning the knob to tighten financial conditions and ensure we are on track to normalize a world with higher interest rates,” Pick said. “But there could very well be surprises, there could very well be reactions,” he said, adding that the market was in the midst of a fight to “kill inflation” that would be played out in 12 to 18 months. Lloyds chief executive Charlie Nunn told the event earlier that British banks were yet to see a “flight to quality” in deposits among customers nervous about the security of their funds after the SVB collapse. Major US banks, including JP Morgan and Citigroup, have seen a wave of customers requesting the transfer of their accounts to larger banks, the Financial Times reported on Tuesday. Goldman Sachs analysts said in a note on Monday that US banking stress could spill over directly to European banks. Santander was described as the only institution with “significant exposure” to US depositholders, with around 12% of total US deposits, while HSBC had 6% and Barclays had 8% in the Americas as a all, said the survey.

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