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UK companies at ‘grave risk’ from Silicon Valley bank collapse, warns Jeremy Hunt

UK companies at 'grave risk' from Silicon Valley bank collapse, warns Jeremy Hunt

UK tech firms are at “serious risk” from the collapse of the British branch of a Silicon Valley bank, Chancellor Jeremy Hunt has warned.

Rishi Sunak and the Chancellor have emergency talks with Bank of England Governor Andrew Bailey later this week as the bank looms large.

Mr Hunt said the government was “working at speed” to limit the damage and would come up with a plan to meet the “cashflow” needs of bank customers in the UK.

The Bank of England has made it very clear that there is no systemic risk to our financial system. sophie ridge on sunday, “But there is a serious risk to our technology and life science sectors.”

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Mr Hunt said: “We are working at speed on a solution, we will be coming out with plans very soon to make sure people are able to meet their cash flow requirements, pay their staff.”

Labour’s shadow chancellor Rachel Reeves urged Mr Hunt to offer companies more than “warm words” – demanding the chancellor come up with a plan by the time markets open on Monday.

She told Sky News: “When the markets open tomorrow morning, a lot of businesses in the UK will be unclear about how they can pay their staff wages and whether their deposits with Silicon Valley Bank and their financial The arrangement is still going on. place.”

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Saying she was “a little concerned” by the level of urgency shown by Mr Hunt, she added: “I urge the government to do more than offer warm words, but come forward with specific plans.”

The Bank of England announced on Friday that Silicon Valley Bank UK is set for bankruptcy following actions by its parent company in the US. SVBUK said it would be declared insolvent from Sunday evening.

While the SVB has a limited presence in the UK and does not perform a significant function to the financial system, its collapse could have a significant impact on tech start-ups.

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In a statement released on Sunday morning, the Treasury said it was viewing the issue as a “high priority” and said the government was “working on a solution to avoid or minimize damage to some of our most promising companies in the UK”. Still working”.

The Treasury said it would bring forward immediate plans to “ensure the Silicon Valley bank is able to meet the short-term operating and cash flow needs of UK customers”.

It added that the government believes that a bank failure “could have a significant impact on the liquidity of the tech ecosystem”.

Chancellor and PM due to negotiate bank collapse with Bank of England


Asked whether the government would use taxpayers’ money to provide support, Mr Hunt said he “doesn’t want to get into what the solution is”.

The chancellor said the government also wanted to find “a long-term solution that minimizes or avoids damage to some of our most promising companies”.

Former Tory chancellor Philip Hammond said the Bank of England would have to “provide some significant and additional liquidity to whoever buys the SVP”.

He said it was vital to take steps to protect the UK’s growing fintech sector. “This is a very important dynamic area and we don’t want to see it affect our goals here in a big way.”

The bankruptcy announcement came after SVB was placed under US government control on Friday afternoon in the biggest US bank failure since the 2008 financial crisis.

The Bank of England said the company would stop making payments and accepting deposits. The move will allow depositors to be paid up to £85,000 from the Deposit Insurance Scheme.

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