Silicon Valley Bank Calls Its Fall From Harmful Transactions With Goldman Sach

US Dollar Illustration (Photo: Doc. Antara)

JAKARTA - Bank Financial Group's Silicon Valley opened its voice about its recent fall. The reason is, there was an participation of Goldman Sachs Group Inc which made the bank bankrupt.

SVB Financial Group stated that Goldman Sachs Group Inc acquired bonds that posted a loss of US$1.8 billion or Rp27.68 trillion (exchange rate of Rp15,380 per US dollar). The transaction made a fall on the SVB.

The portfolio loss forced SVB to sell its $2.25 billion stake last week using Goldman Sachs as an advisor.

However, the increase in capital was thwarted due to the escape deposit. This makes investors worry that SVB will need more capital.

The SVB portfolio, which was sold to Goldman Sachs on March 8, is mostly US Treasury debt securities with a book value of 23.97 billion US dollars. However, transactions were carried out at a negotiated price and generated bank revenues of 21.45 billion US dollars.

SVB has become the largest bank to go bankrupt since the 2008 financial crisis. So this was immediately taken over by US regulators on Friday.

The purchase of Goldman Sachs bond portfolios is handled by a separate division of the unit handling the sale of SVB shares, according to sources familiar with the matter.

Jacob Frenkel, head of government investigations and practices of securities enforcement at law firm Dickinson Wright, said such arrangements for dealing with conflicts of interest were typical in major banks.