The Bank of London has proposed to buy Silicon Valley Bank’s British subsidiary.
The Bank of London is a clearing bank in the United Kingdom and had proposed the deal to the UK Treasury and Bank of England.
A consortium of investors that includes private equity firms leads the Bank of London.
Bank of London co-founder and chief executive Anthony Watson said in a statement: “Silicon Valley Bank cannot be allowed to fail given the vital community it serves.”
He added: “This is a unique opportunity to ensure the UK has a more diversified banking sector, whilst allowing continuity of service to SVB’s UK client base.”
UK authorities also drafted a rescue plan for startups and tech firms hit by the SVB collapse, including cash bailouts for numerous tech firms.
UK Government Response to SVB Crisis
According to a statement from UK Chancellor Jeremy Hunt, the Bank of England had confirmed that SVB had a “limited presence in the UK” and did not “perform functions critical to the financial system.”
It added it understood the “level of concern” the collapse raised for SVB UK customers, namely impacts on “cashflow positions in the short term.”
Hunt stated: “The UK has a world leading tech sector, with a dynamic start-up and scale-up ecosystem. The government recognises that, given the importance of Silicon Valley Bank to its customers, its failure could have a significant impact on the liquidity of the tech ecosystem.”
Downing Street would treat the issue as a “high priority” and launch talks between the Bank of England Governor, British Prime Minister, and Chancellor at the weekend.
Hunt concluded: “The government is working at pace on a solution to avoid or minimise damage to some of our most promising companies in the UK and we will bring forward immediate plans to ensure the short term operational and cashflow needs of Silicon Valley Bank UK customers are able to be met.”
Coadec Statement on SVB Collapse
A further statement from Coadec, a coalition representing British tech firms and startups, work with HM Treasury “remains ongoing.”
The organisation said discussions were “ongoing with potential buyers for SVB UK.” There were numerous potential measures to address “the immediate liquidity and banking problems” under consideration, the statement read.
It aimed to release an announcement “before the market opens on Monday,” Coadec added.
It continued: “The Government has worked incredibly hard over the past several days and we have to give them great credit. At the same time, we have made clear in no uncertain terms the risks that are posed to the UK startup ecosystem and innovation economy if the deal does not do what it needs to in helping companies at risk.”
Coadec concluded that the United States Federal Reserve aimed to resolve the crisis in a way that “fully protects all depositors.”
Silicon Valley Bank has long supported tech startups and Web3 firms, and its recent collapse is the world’s biggest since the 2008 financial crisis.
