Macaskill on markets: SVB – Is hedging only good for Wall Street?

March/April 2023 special coverage CREDIT SUISSE 1: UBS bets on Ermotti 2: Credit Suisse and UBS: The new risks 3: Crisis at Credit Suisse: How we got here 4: Rescue reinforces national champion trend 5: It's time to bail out Michael Klein US BANKS 1: The banking crisis and its consequences 2: Time to review liquidity coverage ratio 3: Regulators won't just target regionals 4: Bad news for others facing AOCI losses 5: HSBC's SVB deal is nimble and contrarian 6: Is hedging only good for Wall Street? 7: We saved the banks - was it worth it?

Goldman Sachs pulled off one part of a planned rescue of Silicon Valley Bank (SVB). Unfortunately, the sale of a portfolio of securities with a book value of almost $24 billion by SVB to the firm on March 8 for $21.45 billion did not accompany a successful equity fundraising and help to shore up confidence in the technology-focused lender.

SVB instead failed within a couple of days, as a bank run prompted its receivership and a US government bailout of its uninsured depositors.

Goldman was at least able to deploy its silver linings trading playbook by turning a quick dealing profit on the purchase of bonds from SVB, which was a cheering result in an otherwise distressing episode for global financial markets.

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