Customers and businesses who had been unable to withdraw funds will now be able to do so as usual. The government and the Bank of England led the talks and worked through the night to hammer out a deal that does not involve taxpayer money.
HSBC stated that it paid only £1 for the SVB’s UK arm. HSBC boss Noel Quinn said the deal had been “too good an opportunity to miss” and had ensured “a crisis in one institution did not become a systemic crisis”.
Silicon Valley Bank, which specialized in lending to technology companies, was closed down by US regulators on Friday, marking the largest bank failure in the United States since 2008.
Its demise sent shockwaves through the tech industry due to the potential impact on businesses, with some firms telling the BBC that they could go bankrupt if deposits were not secured.
Fears about how firms would access cash on Monday morning prompted frantic talks between Chancellor Jeremy Hunt, the prime minister, the governor of the Bank of England, HSBC executives, and civil servants to find a solution.
The Bank of England said no other UK banks had been “materially affected” by SVB’s collapse and said the banking system remained “safe, sound, and well-capitalized”.
Although SVB’s UK arm was small, with just over 3,000 business customers, its failure would have posed a risk to a sector that the government considers critical to the UK’s future economic success.
Mr. Hunt said some of the firms only had bank accounts with SVB UK, “so for that reason, we were faced with a situation where we could have seen some of our most important companies, our most strategic companies, wiped out and that would have been extremely dangerous”.
However, he added there was “never a systemic risk to our financial stability in the UK”.