December 13, 2024 | Premium Service | Several readers of The Institutional Risk Analyst hold stakes in the restructured former parent of Silicon Valley Bank, SVB Financial Group (SVBFG). When SVBFG filed for bankruptcy protection in March 2023, the company had $3.3 billion in debt, no bank subsidiary, a broker dealer and other operating assets that have since been reorganized.
Below we use the example of SVBFG and Washington Mutual to answer some reader questions about the FDIC resolution of Silicon Valley Bank and also think about the likely outcome of any “release” or “rebirth” of the GSEs for common and preferred risk exposures. Is it better to be diluted infinitely or simply zeroed out with finality?
We also note the passing of David Bonderman, a Wall Street giant and co-founder of TPG Capital. TPG was the controlling shareholder of Washington Mutual when it was seized by the FDIC. Peter Lattman wrote in The Wall Street Journal in 2008: "It was bad enough that billionaire investor David Bonderman saw his private-equity firm TPG lose its entire $1.35 billion investment in Washington Mutual Inc. in the past week. What made it worse was that he didn't even know when it was happening."
