CITY AM – Silicon Valley Bank UK: What we know (and what we don’t) on Sunday evening
The Bank of England is set to put Silicon Valley Bank UK into insolvency as soon as this evening – with tech champions warning that the bank’s collapse could be an extinction-level event for a host of UK firms.
This story has been updated as of Monday morning
The bank’s accounts are effectively frozen, meaning that firms will be unable to access their deposits – possibly leaving them unable to pay bills or salaries.
SVB UK’s parent firm in the US has been hit by a bank run, with a host of venture capitalists and depositors pulling cash out following a badly managed cash call in the middle of last week. Sources in the US also suggest that SVB’s management made risky investments in long-term mortage backed securities, which took a pummeling when interest rates rose.
The collapse of Silicon Valley Bank UK (SVBUK) poses a “serious risk” to the UK’s tech and life sciences sectors, Chancellor Jeremy Hunt has warned.
Ministers have said urgent plans to protect businesses from the fallout are being drawn up.
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