Silicon Valley bank crash ‘poses a risk for British start-ups’
Jeremy Hunt has promised the government will do “everything to” protect British tech companies implicated in the Silicon Valley bank collapse.
The Chancellor warned that its failure posed a “serious risk to our technology and life sciences sector” – although he said there was no risk to the UK financial system as a whole.
Urgent talks between Mr Hunt, Prime Minister Rishi Sunak and Bank of England Governor Andrew Bailey took place over the weekend to “find a solution”.
Regulators shut down the bank – which has been run by CEO Greg Becker for the past 12 years – on Friday amid struggles in the tech sector as higher interest rates crowded out investors. Its UK branch was declared bankrupt yesterday.
Mr Hunt said: “We want to find a way that minimizes or, if possible, avoids any losses for these incredibly promising companies.
‘We will come up with a plan very quickly to ensure they can meet their operational cash flow requirements.’ But he did not say whether the government will guarantee companies’ deposits with lenders or step in with taxpayers’ money.
Labor said the start-up industry should not “pay the price” for the bank’s failure.
OakNorth Bank – founded by a former Conservative donor and advised by former Chancellor Lord Hammond – is in talks to buy the ailing bank’s UK operations, Sky News reported last night.
Labour’s shadow chancellor Rachel Reeves said: “I would urge the government to do more than just make warm words but come up with concrete plans.”
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https://metro.co.uk/2023/03/13/silicon-valley-banks-crash-poses-risk-to-uk-start-ups-18428726/ Silicon Valley bank crash 'poses a risk for British start-ups'