The Standard has learned that the government is trying to make Barclays a bid to save the UK unit of Silicon Valley Bank (SVB) from liquidation.
The government has also received interest from a potential Middle Eastern buyer, reports the Financial Times. Meanwhile, SVB UK is looking for a British bank to agree an emergency sale with firms such as Lloyds, Barclays and Bank of London, Sky News reports. SVB is set to enter involuntary liquidation as soon as tomorrow without eleventh hour intervention.
Chancellor Jeremy Hunt said this morning that he was in discussions with the Prime Minister and Bank of England Governor Andrew Bailey to agree a solution to prevent potentially wider damage to the tech sector due to the SVB collapse.
“The government and the bank understand the level of concern for Silicon Valley Bank UK customers, and in particular how this could impact cash flow positions in the short term,” Hunt said in a statement.
“The government is working swiftly on a solution to avoid or minimize damage to some of our most promising companies in the UK and we are working on immediate plans to ensure the short term operating and cash flow needs of Silicon Valley Bank UK customers.” Will bring forward. Meet.”
The UK government has already backed Barclays as a trusted tech partner after it controversially withheld funding from Tech Nation in favor of giving it to the High Street bank in January.
The Bank of England said on Saturday morning that it would include Silicon Valley Bank UK Ltd in the bank insolvency process.
Under the process, under the Financial Services Compensation Scheme, depositors may be paid up to a protected limit of £85,000, or up to £170,000 for joint accounts. The remaining assets and liabilities will be handled by the liquidator.
“SVB UK has a limited presence in the UK and no significant functions supporting the financial system,” the Bank of England said. “In the interim, the firm will stop making payments or accepting deposits.”
But several London tech firms have said the insured limit would not even be enough to pay their staff and meant they were at risk of bankruptcy.
Matt Clifford, co-founder of venture capital business Entrepreneur First, said: “[The] The most common phrase in my inbox right now is ‘we can’t make payroll with insured’.”
He told the Standard: “The basic question is simply what happens to those people who can’t access the money they need. A bunch of them won’t make payroll and a bunch of them will go down.
On a flight to California to meet US President Joe Biden, Rishi Sunak told reporters that there was no systematic risk of contagion due to SVB’s demise, allaying concerns over volatility in the financial sector.
“We do not believe there is a risk of a systemic contagion,” Sunak said. “We are working to recognize the concern and concerns of the bank’s customers and ensure that we can work together to find a solution that secures their operational liquidity and cash flow needs.”
A Barclays spokesperson did not immediately respond to a request for comment.
Credit: www.standard.co.uk /