The US Department of Justice launched an investigation into the circumstances and actions of senior bank officials that led to the collapse Silicon Valley Bank (SVB). The investigation is still in its early stages, a source familiar with the matter but who requested anonymity told the Washington Post.

“Popular” in the ranks of technology companies and startups, SVB collapsed last week. Its collapse stands out as the second largest in the history of American banking.

The Silicon Valley Bank was founded four decades ago in 1983 and was 16 years old when it collapsed last week.^V largest bank in the US.

During the pandemic, SVB saw its “jobs” flourish amid a general upswing in the tech sector.

Many tech companies will start “sending” the cash they used to pay salaries and other business expenses to the SVB, which will lead to an influx of deposits. However, the bank subsequently invested most of these deposits elsewhere.

The bank’s managers invested, among other things, in US government bonds.

However, when interest rates rise, bond prices fall. So when the Federal Reserve (Fed) began raising interest rates to fight inflation, the SVB bond portfolio began to lose value.

At the same time, economic conditions have worsened over the past year, hurting technology companies in the US, causing many of the bank’s customers to withdraw money from their deposits.

SVB began to sell some of its bonds at a big loss, scaring clients and investors. In such a context, clients will suddenly start withdrawing their deposits en masse… leading to a crash.

US President Joe Biden, for his part, has already said that those responsible for the collapse of Silicon Valley Bank will be held accountable.

In addition to the US Department of Justice, a corresponding investigation was also launched by the Federal Bank (FRS), while the central place in the object of investigations is now, judging by the reports of American publications, Greg Becker who served as CEO of SVB until the collapse.

Becker is said to have been one of the banking executives who has lobbied Congress in recent years to weaken the US banking regulatory framework.

According to the Washington Post, The Guardian.