Finance
According to media reports, the UK government is working on a plan to ensure that UK tech firms affected by the failure of Silicon Valley Bank (SVB) do not run out of cash.
According to the BBC, the Treasury said it wanted to “minimize damage to some of our most promising companies in the UK” following the failure of the US bank last Friday.
On Friday, US regulators shut down the bank, the largest failure of a US bank since 2008.
According to the BBC, the bank’s UK subsidiary will be declared bankrupt on Sunday evening.
In response to the failure of SVB UK, UK Prime Minister Rishi Sunak, Chancellor Jeremy Hunt, and Bank of England Governor Andrew Bailey met over the weekend.
The Treasury stated that the issue is a “high priority” on Sunday morning.
It stated that the bank’s failure could have a significant impact on UK tech companies and that it was “working at pace” on a solution.
It also stated that it would “bring forward immediate plans to ensure the short term operational and cashflow needs of Silicon Valley Bank UK customers can be met,” according to the BBC.
On Saturday, more than 250 UK tech executives signed a letter to Hunt requesting government intervention.
SVB failed to raise $2.25 billion in the United States to cover a loss from the sale of assets, primarily US government bonds, that were impacted by higher interest rates.
Its problems prompted a run on the bank in the United States and raised investor concerns about the overall state of the banking sector, according to the BBC.
SVB specialized in early-stage lending, and the company banked nearly half of the US venture-backed technology and healthcare companies that went public last year.
Source:OCN
