Hedge funds made more than $7B in profits by betting bank shares during the recent crisis in the sector.
This
is the most significant gain since the 2008 financial crisis. According
to data group Ortex, short sellers made an estimated total profit of
about $1.3B from short positions against Silicon Valley Bank.
- SVB collapsed on March 10 after suffering a run on its deposits.
- The bank was shut down by financial regulators and handed over to the FDIC.
- SVB’s
sudden collapse triggered concerns about the financial health of
regional banks leading to several banks seeing a significant drop in
their deposits.
- Global banking giant Credit Suisse had to be rescued by Swiss government officials through a forced sale to rival UBS.
- Investors made $684M from shorting Credit Suisse.
- Profits from short positions across the U.S. and European banking sectors totaled $7.2B.
