HSBC has snapped up the British arm of Silicon Valley Bank for just £1 in a government and Bank of England-brokered deal.
It marks the most significant such bailout since the 2008 financial crisis and follows late-night talks over the weekend after the collapse of Silicon Valley Bank’s US parent company, amid concerns about liquidity.
The private sale meant hundreds of British tech start-ups are saved from financial disaster as Chancellor Jeremy Hunt insisted all deposits had been protected, but the move sparked markets turmoil.
In the US, the Federal Reserve also announced US depositors will be protected as California-based Silicon Valley Bank is seized by regulators and its assets are auctioned.
Over 48 hours last week, there was a cash run on the US bank as start-ups tried to retrieve deposits.
Liquidity rumours amplified by social media and a sinking share price followed pleas by SVB boss Greg Becker to “stay calm” on a conference call to investors.
Meanwhile, another American commercial bank, Signature Bank, has also closed.
Latest insight on the emergency sale and sector’s future with Jesse Griffiths, chief executive of London’s Finance Innovation Lab.
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