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Norway’s oil fund held over $263 million in Signature Bank and SVB Financial Group, the owner of Silicon Valley Bank (SVB), which failed spectacularly over the weekend, sparking government intervention.
MarketWatch reports that the Norwegian sovereign wealth fund (SWF) held around $263 million in SVB Financial Group and Signature Bank, based on last week’s valuations.
"This is the biggest U.S. bank collapse since the financial crisis and we are closely monitoring the situation in the market," Norges Bank Investment Management (NBIM), which manages the SWF, said in an emailed statement to MarketWatch.
Both Silicon Valley Bank (SVB) and Signature Bank have now been taken over by the federal authorities.
SVB, the go-to lender for tech startups backed by venture capitalists, failed dramatically on Friday, with shares plunging 60% before the SEC halted trading. On Wednesday, the bank announced a massive capital raise, saying it would sell $2.25 billion in new shares to fix the balance sheet. That spooked investors, who feared the high share of uninsured deposits, creating a panic and a run on the bank. Shares tanked on Thursday, leading to an FDIC takeover on Friday.
On Sunday, Washington launched emergency measures to avoid the contagion spreading into a wider financial crisis. The Biden administration pledged that banks will bear the losses, not taxpayers.
The failure of these regional banks has sparked fears of a contagion spreading and leading to another financial crisis on the level of the Lehman Brothers collapse. Those fears have led to a drop in oil prices on Monday, and a battered Dow.
Oil prices plunged as much as 5% before the opening bell on Monday, retracing somewhat by the early afternoon. As of 1:25 p.m. EST on Monday, both Brent and WTI were trading down 1.86%.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com