London Daily

Focus on the big picture.
Thursday, Dec 26, 2024

British Tech Sector "At Serious Risk" After US Bank Collapse: UK Minister

British Tech Sector "At Serious Risk" After US Bank Collapse: UK Minister

Britain's technology and life sciences sectors are at "serious risk" following the closure of the Silicon Valley Bank, Chancellor Jeremy Hunt warned on Sunday.
The California-based SVB bank, which was closed by US authorities on Friday, manages the money of some of the UK's most promising businesses, Hunt said.

"There is a serious risk to our technology and life sciences sectors, many of whom bank with this bank," Hunt said in an interview with British television channel Sky News.

"Most people won't have heard of the Silicon Valley Bank but it happens to look after the money of some of our most promising and exciting businesses."

The bank is expected to reopen on Monday under a new name with the US deposit guarantee agency, the FDIC, taking control.

Hunt said the governor of the Bank of England had made it "very clear" that there was no systemic risk to the UK's financial system due to the SVB's collapse.

The government would bring forward plans "very soon" to ensure people are able to meet their cash flow requirements and pay staff.

It would also put a longer-term solution in place to minimise or completely avoid losses to British companies, he added.

The British Treasury said Saturday that the problems of the failed SVB bank were "specific to the firm" and had no "implications for other banks operating in the UK".

The bank failed after its customers, mainly from the tech sector, made massive withdrawals, and after its latest attempt to raise new money proved unsuccessful.

Little known to the general public, SVB specialised in financing start-ups and had become the 16th-largest US bank by assets.

Its demise is not only the largest bank failure since Washington Mutual in 2008, but also the second-largest retail bank failure in the US.

The Bank of England said it intended to pursue insolvency with regards to the bank's British subsidiary.

"It was looking inevitable that the dramatic loss of confidence in SVB would also sweep its UK arm into insolvency," said Susannah Streeter of financial firm Hargreaves Lansdown.

"The run on the US bank spooked customers banking with the British subsidiary, despite protestations that it was ring-fenced from its parent," she added.

Sky News reported that the Bank of London, which launched just two years ago, is among those mulling a bid for SVB's British arm.
Newsletter

Related Articles

0:00
0:00
Close
Pope Francis Urges Unprecedented Dialogue Amid Escalating Ukraine-Russia Tensions
Dozens Survive Kazakhstan Passenger Jet Crash Amid Tragedy
Kazakhstan Air Disaster: Dozens Survive as Authorities Probe Fatal Plane Crash
Postal Workers Demand Government Probe Into Royal Mail 'Fake Deliveries' Scandal
Explosion Sinks Russian Cargo Ship Ursa Major in Mediterranean
Mystery Shrouds U.S. Citizen Gene Spector's 15-Year Espionage Sentence in Moscow
Zelenskyy Alleges 3,000 North Korean Casualties in Russian Conflict
North Korea's Unseen Hand: Over 1,000 Troops Suffer Casualties in Ukraine
Discovery of 50,000-Year-Old Baby Mammoth in Siberia Fascinates Scientists
Magdeburg Attack Fuels AfD's Political Momentum Amid Rising Tensions
In Magdeburg, Germany, a man is arrested by the police for declaring, "I am a Christian."
UK News Roundup: London Shooting, Travel Disruptions, and Legal Battles
UK Economy Teeters on Recession's Edge Amid Revised Growth Figures
Australian Man Captured in Ukraine Conflict; Government Seeks Answers
Zelenskyy’s Push for NATO: A High-Stakes Gamble for Eastern European Stability
Slovak Pragmatism or EU Discord: Prime Minister Fico’s Polarizing Moscow Engagement
The Ripple Effects of a Russian Victory in Ukraine: A Global Tectonic Shift
U.S. Government Shutdown Averted by Last-Minute Agreement
Tragedy in Magdeburg: Saudi Doctor's Alleged Terror Attack at German Christmas Market Ignites Global Security Debate
Tragedy Strikes at Magdeburg Christmas Market: Terror Attack Leaves Five Dead
Texas Congresswoman Kay Granger Discovered in Nursing Home Following Six Months of Inaction
Prince William to End Feudal Land Restrictions in Duchy of Cornwall, but Controversies Remain
British police appear unprepared to deal with usual suspects
Russia's Ballistic Blitz on Kyiv Sends Shockwaves Through Global Stability
Multiple Tragedies and Tensions Mark Global Events: A Closer Look
Elon Musk's AfD Endorsement Ignites Controversy from neo-Nazis who accuse the AfD of being what they themselves are
Ukraine Claims Unprecedented Russian Losses: The Truth Behind Wartime Statistics
Federal Reserve Chair Powell: "We are prohibited from owning Bitcoin and are not seeking any changes to that law."
A Democratic congresswoman with blue and black hair is having a meltdown over "President Musk."
A sizable group of unauthorized migrants is traveling through Mexico with the aim of reaching the USA before Trump assumes office.
Beatles Reunion Electrifies London: Paul McCartney and Ringo Starr Ignite O2 Arena with Surprise Performance
Starmer's Envoy Engages Trump Team as UK Seeks Strategic U.S. Partnership
Britain's Retail Rebound Falters as Black Friday Splurge Dissipates
Bank of Japan's Bold Reckoning: A Decade of Unconventional Policy Under Scrutiny
Republican Discord Threatens Government Shutdown Amid Holiday Season
French Retiree Dominique Pellico Convicted for Recruiting 72 Men to Assault Wife Over a Decade
Putin Defends War Strategy as Global Tensions Rise
Putin Claims Progress as Tensions Rise: Conflict in Ukraine Intensifies
Putin's Paradox: Claiming Strength Amidst Sanctions and Isolation
Water as a Weapon: The Contentious Struggle for Survival in Gaza
Syria's Future: A Fight for Democracy or Another Cycle of Oppression?
UK Considers Sending Troops to Ukraine: A Strategic Move or Intensifying The Proxy War?
Renewed ISIS Threat Puts Syria’s Cultural Heritage in Peril
Escalation in Moscow: High-Profile Assassination and International Tensions Intensify
North Korean Troops in Ukraine: A New Cold War Frontier?
Ukraine's Bold Move: High-Stakes Assassination of Russian General in Moscow
Dubai's Technological Leap: Brain Chips and AI Board Members by 2025
Tragedy Strikes Wisconsin School as Shooting Claims Lives of Teacher and Student
UK's Calculated Gamble: Balancing Defense Aid to Ukraine and Domestic Demands
UK Intensifies Stranglehold on Russian Oil, but Does It Dampen Putin’s Resolve?
×