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Silicon Valley Bank collapse: UK tech firms at ‘serious risk’ from failure, warns Chancellor Jeremy Hunt | Politics News



British technology companies face “serious risks” from the collapse of the UK branch of Silicon Valley Bank, the prime minister has warned, but said the government is “working with speed” to limit damage.

Jeremy Hunt said the government was making the matter a “high priority”.

He held talks with the Prime Minister Rishi Sunak and governor of Bank of England Andrew Bailey over the weekend.

The central bank announced on Friday that Silicon Valley Bank UK has been set to enter insolvencyfollowing the parent company’s actions in the United States.

that is first reported by Sky News City editor Mark Kleinman

Although Silicon Valley Bank (SVB) has a limited presence in the UK and does not perform important functions for the financial system, the bank has been warned that its demise could significant impact on technology startups.

Speaking to the Sophy Ridge On Sunday programme, Mr Hunt said: “The Bank of England has made it very clear that there is no systemic risk to our financial system, so people should rest assured on that basis. that department.

“But there is a serious risk to our technology and life sciences sectors.

“It happens to take care of the money of some of our most promising and exciting businesses.

“And so I want to reassure everyone, I have been discussing from the weekend until last night with the prime minister, the governor of the Bank of England, and many others.

“And we’re working at speed on a solution, we’ll be rolling out plans soon to make sure people can meet their cash flow requirements, pay their employees.

“But clearly what we want to do is find a long-term solution that minimizes or even completely avoids the loss of some of our most promising companies.”

He added: “The Prime Minister, I and the governor of the Bank of England are absolutely determined to do everything we can to protect these very, very important companies.”

Labour’s shadow chancellor Rachel Reeve called on the government to provide more “warm words” to companies affected by the bank’s collapse.

She told Ridge: “I’m a bit concerned about the level of urgency you’ve heard from the prime minister there because when the markets open tomorrow morning a lot of businesses in the UK will not be clear on how they have can pay its employees and whether their deposits with Silicon Valley Bank and their financial arrangements are still in effect.

“So I would urge the government to do more than give warm words, but come up with concrete plans.”

Dom Hallas of the Coalition for the Digital Economy (Coadec) said: “Clearly this could have a significant impact on the UK’s tech startup ecosystem.

“In light of the anxiety and panic, I wanted to share an update on what we know and where we are.

“We know that there are a large number of startups and investors in the ecosystem with significant exposure to SVBUK and would be very concerned.

“We have been working with the UK Government, including the Treasury and Number 10, on the potential impact and I know that work has been underway overnight on policy options.”

SVBUK said it will be insolvent from Sunday night.

It is a subsidiary of Silicon Valley Bank (SVB) and the first location to be opened outside of the US.

The insolvency notice comes after SVB was placed under US government control Friday afternoon in the biggest bankruptcy of a US bank since the 2008 financial crisis.

The BoE said the company would stop making payments and taking deposits.

The move will allow depositors to be paid up to £85,000 from the deposit insurance scheme.

A statement on the SVB website said: “We announce that, following conversations with the prudent Regulator, there is an intention, to prevent any event of interference, to bring Silicon Valley Bank UK Limited entered insolvency from Sunday evening.

“We are determined to work on behalf of our customers and are proud of our employees when they are with you.

“If customers have any questions, please contact us and we will do our best to answer any and all of your questions.”

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