Goldman traders bought bonds from SVB as its bankers tried to help plug the hole. Colleagues in investment may be able to pick up troubled assets. It’s true to Solomon’s One Goldman vision, though ideally the client lives to tell the tale, says jgfarb.
Goldman Sachs CEO David Solomon speaks during the Goldman Sachs Investor Day at Goldman Sachs Headquarters in New York City, U.S., February 28, 2023. REUTERS/Brendan McDermid
NEW YORK, March 15 - The collapse of Silicon Valley Bank is providing a slightly awkward showcase for Goldman Sachs’ manifold talents. The Wall Street firm’s traders bought bonds from the technology-focused lender as its bankers attempted to help plug the resulting hole the sale left in SVB’s balance sheet. And it is in position to scoop up troubled assets elsewhere. It’s true to the new unified “” strategy expounded by Chief Executive David Solomon, dampened by the client not living to tell the tale.
Goldman was a logical place for SVB Chief Financial Officer Daniel Beck to call when Moody’s Investors Service warned him a couple weeks ago that it was considering downgrading his bank’s credit rating by two notches. The investment bank Solomon now leads scrambled throughout the financial crisis to help panicked clients shore up their finances.
This time, Goldman’s capital-raising powers fell short. SVB’s financial models had to be revised on the fly and approved by its board as the situation deteriorated. The speed with which depositors pulled their funds also meant there was no time for Goldman to invite big fund managers to “cross the wall,” the process in which banks show potential investors material non-public information that would make them comfortable enough to buy new shares ahead of any public disclosure.
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