The good news is that it took only a long weekend to find a fix – a good one – for the UK end of the doomed Silicon Valley Bank. Our tech executives can stop writing emotional pleas to the chancellor about their unique importance to the nation’s prosperity. The bad news is that US regulators’ solution for the very much larger parent bank raised more questions than it answered. The fallout from the failure of SVB, plus the closure of Signature Bank, could get a lot worse yet.
Let’s start with the positive, though. The sale of SVB’s UK subsidiary to HSBC for £1 is satisfactory from almost every angle. The customers will pass to Europe’s biggest bank, a haven they might have chosen before their cash was trapped at the end of last week. They now have immediate access to their money. The Treasury will be delighted that it has avoided putting public funds at risk. The likely plan B, involving lines of credit to the SVB UK’s customers, sounded horribly messy.
