In bankruptcy on March 10, the American Silicon Valley Bank, which dealt with crypto companies, issued record loans to insiders in the fourth quarter of last year in the amount of more than $219 million, Bloomberg reports. The publication notes that the number of loans to high-profile individuals increased as news of SVB’s problems became known.
The bank was closed and placed under the administration of the Federal Deposit Insurance Commission on March 11. Two days earlier, the bank’s parent company announced an emergency bond sale of $21 billion from its portfolio and a $1.8 billion loss that followed.
Experts associate the collapse of the largest US bank with the general crisis of the global venture capital market in 2022. Over the 9 months of last year, it fell 27% to $329 billion.
According to Bloomberg, in the last quarter, the bank increased the issuance of loans to main shareholders and officials three times compared to the previous quarter. According to the agency, $219 million is a record volume of insider lending in a single quarter over the past 20 years.
The collapse of the SVB has attracted the attention of the US Department of Justice and the Securities and Exchange Commission. The Federal Reserve and the US Congress are also investigating the incident. Therefore, Bloomberg notes, record borrowing may be of interest to government officials. According to the agency, the names of the recipients were not indicated in the government documents.
The article highlights that against the background of the news about SVB’s problems, issued loans only increased.
The collapse of the largest bank that invested in startups affected financial institutions not only in the United States, but around the world. US economists have calculated that 186 banks may face similar difficulties.
Startups, unsurprisingly, suffered from SVB’s bankruptcy and OpenAI came to their aid. His executive director, Sam Altman, has pledged to allocate funds to youth projects out of his own pocket.
Author:
Natalia Gormaleva
Source: RB
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
