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Government and Bank of England facilitate sale of Silicon Valley Bank UK

ended 13. March 2023

Silicon Valley Bank (UK) Ltd has today been sold to HSBC. Customers of SVB UK will be able to access their deposits and banking services as normal from today. This transaction has been facilitated by the Bank of England, in consultation with the Treasury, using powers granted by the Banking Act 2009.  No taxpayer money is involved, and customer deposits have been protected. Making use of post-crisis banking reforms, which introduced powers to safely manage the failure of banks, this sale has protected both the customers of SVB UK and taxpayers.

Chancellor Jeremy Hunt said:

“The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.

“Today the government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order.

“HSBC is Europe’s largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them.”

We asked tech companies for their thoughts…

2 responses from the Newspage community

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Rob Cossins
Co-founder & CEO at Scribe
HSBC acquiring SVB UK is an excellent outcome for the UK tech ecosystem. Many UK technology companies were faced with existential risk, so I'm glad that all the relevant stakeholders appreciated the importance of protecting deposit-holders in the UK's most innovative sector. Founders that were looking unable to pay wage bills this week are now protected and thousands of jobs have been saved.
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Ben Timberley
Principal Consultant at BlackBook Consulting Ltd
The Silicon Valley Bank collapse is accompanied by two other US bank collapses, both of which are in the cryptocurrency space. All three were under-capitalised and all three were subject to banking runs. HSBC have bought the UK arm of SVB, probably because they were over-exposed to it. But the story doesn't end there. The US Government have essentially guaranteed the at-risk accounts from SVB. This means they have backed a market failure with government funds, with all associated share positions and loans open to negative speculative trades and futures. Black Wednesday in the 90's here in the UK shows what happens when a Government-backed position is based on overinflated value assessments and a failed market position. Remember "CDOs"? This is going to get worse. Big names may fall.