Washington isn’t the only one scrambling to deal with the collapse of the Silicon Valley Bank.
UK officials are conducting all night talks between Sunday and Monday in a last-ditch effort to find a buyer for SVB’s British unit, announcing that HSBC will take over the bank with just one hour to go before markets open.
The UK bailout deal is the most egregious example of how SVB’s global reach has forced governments around the world to pledge to stabilize markets and protect local startups in the country’s biggest collapse yet. a US bank since 2008.
After the Bank of England said it would happen find the start Insolvency proceedings for the UK unit of SVB on Friday, officials scrambled to negotiate the sale of the local subsidiary and avoid direct intervention to protect customers.
On Monday morning, the chancellor of the exchequer of the country took the Twitter to announce that there is a buyer: HSBC. The British bank said in a statement that it bought the British unit of SVB for grand total on £1 ($1.21).
Hunt said on Twitter that depositors would be protected, at no cost to taxpayers.
This morning, the Government and the Bank of England conducted a private sale of Silicon Valley Bank UK to HSBC
Deposits are protected, without taxpayer support
I said yesterday that we will take care of our technology sector, and we are working urgently to deliver on that promise
— Jeremy Hunt (@Jeremy_Hunt) March 13, 2023
Members of the UK startup community are calling on the government to take more aggressive action to save the bank. More than 250 tech executives wrote to Hunt on Saturday describing the collapse of SVB as an “existential threat” to the country’s technology sector, reports said. Reuters.
British startups even pointed to the US response to the SVB, announced on Sunday, to encourage officials to do more, with an association representing startups calling Washington’s response “bar ” which should reach London.
One last update for tonight: https://t.co/LPmCWiyHfU pic.twitter.com/DUpuKzFY2J
— Coadec (@Coadec) March 12, 2023
Hunt had previously promised to help startups meet payroll and other cash flow obligations if their SVB accounts were frozen.
Canada
The UK is not the only country experiencing the effects of the SVB collapse.
Also on Sunday, Canada’s banking regulator took temporary control of SVB’s Canadian unit, and said it would seek to wind down the bank’s operations. The Office of the Superintendent of Financial Institutions said it took action to protect SVB’s creditors. Unlike the US, the Canadian arm of the bank does not take deposits.
However, Canadian startups, like their US counterparts, risk having their accounts frozen due to the SVB collapse. One such company, adtech provider AcuityAds Holdings, said that 90% of its money tied to SVB deposits.
China
Silicon Valley Bank is also one important partner for many startups in China. The bank was one of the first foreign institutions to serve China’s technology sector, and Chinese founders also participated. enjoy of networking opportunities through the bank.
SVB has a joint venture with Shanghai Pudong Development Bank. On Saturday, the joint venture said it had “always operated in a robust manner in accordance with Chinese laws and regulations, with a standard governance framework and independent balance sheet,” in a statement to WeChat, according to South China Morning Post.
However it is unclear whether the now-failed US bank will remain a partner in the joint venture due to its collapse, according to Financial Times.
More than a dozen companies listed in Hong Kong IMPARTED that they have deposits with SVB in the exchange filings last Sunday. On Monday, the Hong Kong Monetary Authority, the city’s de facto central bank, said it was monitoring the situation while saying that the city’s banking system can withstand the collapse of SVB.
Even countries without Silicon Valley Bank’s presence are paying close attention to its collapse. The Bank of Korea said Monday that it is ready Encouragement equity and currency markets in the country for any SVB-related fallout.
The US response
On Sunday, the US Federal Reserve Office has partnered it protects all Silicon Valley Bank deposits, including those that exceed normal US deposit insurance limits. Depositors can access their accounts on Monday, said the officials.
The Federal Reserve promised LIKE protection for depositors of Signature Banka New York-based bank that also failed over the weekend.
The Federal Reserve also announced a new lending program allowing banks to borrow money from the central bank using bonds and other securities—priced at par, rather than market value—as collateral.
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