UK Government Working to Minimize Disruption From SVB Collapse
10:50 GMT 12.03.2023 (Updated: 15:26 GMT 28.05.2023)
© AP Photo / Jeff ChiuA food delivery worker enters Silicon Valley Bank in Santa Clara, Calif., Friday, March 10, 2023.
© AP Photo / Jeff Chiu
MOSCOW (Sputnik) - The UK government is working to "avoid or minimize" the fallout from the collapse of US-based Silicon Valley Bank (SVB), Chancellor of the Exchequer Jeremy Hunt said on Sunday.
"The government is treating this issue as a high priority… [and] working at pace on a solution to avoid or minimise damage to some of our most promising companies in the UK," the official said in a statement.
Prime Minister Rishi Sunak and Hunt held talks with the Governor of the Bank of England, Andrew Bailey, over the weekend in response to SVB's implosion, the statement added.
According to The Financial Times, over 200 UK-based tech company heads urged the government to intervene, noting that many firms faced an "existential threat" because of banking with SVB. Dom Hallas, executive director of Coadec, a lobby group for UK-based tech companies, told the newspaper that it was "a real moment of crisis for British start-ups."
On Saturday, dozens of UK tech companies that had been banking with the UK branch of SVB wrote to Hunt to request state intervention, warning they could become technically insolvent overnight if no action was taken.
11 March 2023, 19:06 GMT
On Friday, the Bank of England said it intended to apply to the court to place the UK arm of SVB into a bank insolvency procedure.
US media said that SVB served start-ups and venture capitalists, but also provided private banking services. The bank's collapse left start-up founders fearing that they may have to cut workforce if the money deposited in SVB is lost or frozen.
The US Federal Deposit Insurance Corporation said SVB became the largest bank to fail in the US after the 2007–2008 financial crisis.