London Daily

Focus on the big picture.
Wednesday, Jan 15, 2025

Britain to bolster the City after Silicon Valley Bank collapse

Britain to bolster the City after Silicon Valley Bank collapse

The collapse of Silicon Valley Bank has shown the need to build a larger and more diverse financial system by bolstering the stock market and unlocking cash in pension schemes, Britain's finance minister Jeremy Hunt said on Wednesday.
Following the collapse of its parent company in the United States, Silicon Valley Bank's UK arm was sold to HSBC over the weekend to avoid disrupting its customers in Britain. SVB was heavily focused on lending to the technology sector.

Fallout from the collapse continued to roil banking shares in Europe on Wednesday.

Referring to current volatility in markets on the back of rising global interest rates, Hunt's budget said regular stress testing by the Bank of England means that UK banks are "well placed" to weather economic shocks.

The "wider UK banking system remains safe, sound and well capitalised", it said.

But the rapid sale of SVB's UK unit last weekend showed that "we need to build a larger, more diverse financing system, where the benefits of investment in high growth firms are available to more investors", Hunt said.

Hunt said he would make a statement in the autumn on how the UK financial system would be strengthened.

"It will include measures to unlock productive investment from defined contribution pension funds and other sources, make the London Stock Exchange a more attractive place to list, and complete our response to the challenges created by the U.S. Inflation Reduction Act," Hunt told parliament in his budget statement.

Julia Hoggett, chief executive of London Stock Exchange plc, said the listings debate affects everyone as money put to work in capital markets drives economic growth.

"Pace and precision of regulatory reform are needed, including to listing rules and other expectations placed on listed companies," Hoggett said.

Chris Hayward, policy chairman at the City of London Corporation, said the government has listened to calls on how defined contribution funds can be better used to support high-growth industries.

"We have been working with the sector on a Future Growth Fund - a 50 billion pound fund - which will give DC pension savers the chance to invest in growth companies," Hayward said.

City Minister Andrew Griffith has said that an accounting rule for pension funds has become a "performance penalty" which holds back investment in Britain.

A decision by UK chip designer Arm to only list in New York has dismayed the City of London, triggering calls for faster reforms to help the capital's financial district compete better with leader New York in global tech listings.

UK listing rules have been amended after Britain left the European Union in 2020 and Britain has set out a welter of proposed post-Brexit changes to capital market rules known collectively as the Edinburgh Reforms.

The financial sector has called for faster implementation of the proposals after Amsterdam overtook London as Europe's biggest share trading centre.

On Wednesday, the government said it would consider possible reforms to simplify the value-added tax (VAT) treatment of financial services. It also remains committed to disposing of by 2026 its now-minority stake in NatWest Group, acquired during a bailout of the lender during the 2007-09 financial crisis.
Newsletter

Related Articles

0:00
0:00
Close
S.E.C. Sues Elon Musk Over Alleged Twitter-Related Securities Violations
France Urges EU to Act on Musk's Political Influence as Tensions Rise
Former Special Forces Blast Defense Ministry for Revealing Sensitive Details
Celebrity Responses to California Wildfires: Charity, Criticism, and Controversy
The Wildfires of Los Angeles: A Devastating Impact on Celebrities and California's Leadership
Tragic Loss: Teenager's Death Sparks Community Reflection in Bedford and London
UK Government Proposes Cap on Resale Ticket Prices to Combat Touts
Greenland's Future Caught in Diplomatic Crossfire Between Trump and Europe
EU Prepared to Lead Support for Ukraine Amid US Uncertainty, Says Estonian Prime Minister
Brompton E-Bike Component Diverted to UK Military Drone Production, Causes Delays
Romanian Gang Convicted of Human Trafficking and Exploitation in Dundee
Persistent Cold Snap Grips the UK: Severe Frost and Snow Disrupt Daily Life
Germany Faces Alarming Rise in Homelessness, New Report Shows
China’s Appetite for Salmon: A Game Changer in Global Seafood Markets
Russian Bots Allegedly Amplified NATO Critic Prior to Croatian Election, Researchers Reveal
Armenia Considers EU Membership Referendum Amid Strained Ties with Russia
French Finance Minister Explores Pension Reform Compromise to Secure Budget Agreement
Armenia Considers EU Referendum Amid Growing Rift with Russia
New Wildfire Ignites in Los Angeles as Region Battles Devastating Blazes
The Espionage Unraveled: A Russian Spy Network's Intricacies in the UK
U.S. Supreme Court Rejects Trump's Bid to Delay Sentencing in Hush Money Case
UK Financial Markets Remain Calm Amid Rising Government Borrowing Costs
Stellantis Achieves UK Electric Vehicle Sales Mandate Amid Factory Closure
TikTok Faces Potential Ban in the United States Amid Security Concerns
Pound Plummets to 14-Month Low Amid Concerns Over UK Borrowing Costs
Tensions Rise Over Planned Pro-Palestinian March in London
Bomb Scare in Central London: Abandoned Car Sparks Panic Near Regent Street
Police Seek Suspect in Antisemitic Incident at Liverpool Street Station
Regulatory Reprimand for London Charity Over Fundraising for Israeli Soldier
The Duchess of Sussex Mourns Devastating Loss of Beloved Rescue Dog
From Chairman to Controversial Politician: Rupert Lowe's Journeys in Business and Politics
Metropolitan Police Halts Pro-Palestine March Near BBC Due to Proximity to Synagogue
Inside Warwick Hospital: A Glimpse into the NHS's Battle Against Winter Pressures
Chappell Roan: A Synth-Pop Sensation Emerges as BBC Sound Of 2025 Winner
Search Intensifies for Missing Aberdeen Sisters Eliza and Henrietta Huszti
Pioneering Drug Consumption Room Opens in Glasgow
Ryanair Initiates Legal Action Against Disruptive Passenger in Landmark Case
Former Brexit Negotiator Oliver Robbins Appointed Top Civil Servant at UK Foreign Office
British Hiker Found Deceased Amidst Dolomites Search: Investigation Underway
Pound Falls as UK Borrowing Costs Reach Financial Crisis Levels
Italian Journalist Cecilia Sala Released from Iranian Detention
OpenAI CEO Sam Altman Faces Allegations of Childhood Sexual Abuse by Sister
OpenAI CEO Sam Altman Denies Sister's Allegations of Sexual Abuse
UK Markets Under Pressure as Gilt Yields Surge
Arrest Made in Connection to Stabbing of Iranian Journalist in London
Arrest Made in Fatal Drive-By Shooting Outside London Church
Parliamentary Suspension Over Racist Remarks Highlights Tensions in UK Politics
Debate Intensifies Over Call for Child Abuse Inquiry Amidst Musk's Comments
Mark Zuckerberg's U-Turn: Moving Toward Free Speech on Facebook and Instagram, For a Change
Britain's authorities' support for pedophiles has gone insane
×