Did Silicon Valley Bank Collapse Affect UK Banks? British Treasury's Reply
12-Mar-2023
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London: The problems of the failed SVB bank were "specific to the firm" and had no "implications for other banks operating in the UK," the British Treasury said Saturday.The UK banking system, one of the largest in the world, "remains strong and resilient," the finance ministry said in a press release, adding the government was meeting with representatives of the technology sector to address their concerns.US authorities closed the California-based Silicon Valley Bank (SVB) on Friday with the US deposit guarantee agency, the FDIC, taking control.The bank is expected to reopen on Monday under a new name.Finance minister Jeremy Hunt spoke to the governor of the Bank of England on Saturday morning regarding Silicon Valley Bank UK, the US bank's UK subsidiary, to ensure that its failure "is managed smoothly, and that any disruption is minimised Treasury officials have been speaking to firms affected and held a roundtable with industry representatives on Saturday "to discuss the situation and the worries they face", added the statement.The government recognises that tech sector companies are often not cashflow positive as they grow, and that they rely on cash deposits to cover their day-to-day costs," it said.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.
