UK races to minimise damage from Silicon Valley Bank collapse

LONDON, (Reuters) -British minister of finance Jeremy Hunt claimed on Sunday that he was with Prime Minister Rishi Sanak and Bank of England Governor Andrew Bailey. “avoid or minimise damage” This is the result of the chaos surrounding the UK Silicon Valley Bank arm.

“We’ve been working at pace over the weekend, through the night,” Hunt said Sky News “We will bring forward very soon plans to make sure people are able to meet their cashflow requirements to pay their staff.”

Hunt indicated that all efforts are being directed towards finding a “longer-term solution that minimises, or even avoids completely, losses to some of our most promising companies.”

Friday’s spectacular failure of SVB Financial Group in the United States, which focuses primarily on tech startups, was the worst U.S. financial crisis since 2008.

Hunt explained that because of the importance of the bank for its customers, it could have a significant effect on some companies.

As insolvency looms Rothschild & Co, an advisor firm, is looking at options for the UK-based arm of Silicon Valley Bank UK Limited. Two people familiar with the discussions told Reuters Saturday. According to the BoE it has requested a court order to insolvency proceedings for the UK arm.

A letter requesting government intervention was signed on Saturday by 250 top executives from UK tech companies, according to Reuters.

Some depositors in Britain are entitled to compensation up to 85,000 Pounds ($102,000) for cash held by lenders. Joint accounts can be eligible for 170,000 Pounds. Deposits may not be available to customers who have deposits beyond that amount.

Hunt reiterated the BoE’s comment that Silicon Valley Bank had a very limited presence in Britain, and did not perform any functions essential to the financial sector.

Despite this, the Federal Deposit Insurance Corporation of the United States (FDIC) was still trying to find another bank that would be willing to merge with Silicon Valley Bank. People familiar with the matter stated on Friday to minimize the fallout.

Many investors and financial industry executives are increasingly worried that the collapse could have a domino-effect on other U.S. regional bank branches if regulators don’t find a buyer by the weekend to protect deposits uninsured.

($1=0.8314 pounds)

(Reporting by Andrew MacAskill, William Schomberg; Editing done by Hugh Lawson and Elisa Martinuzzi;