Can the UK save its startups as SVB fallout spreads around the world

ambcrypto.com:

The UK is racing ahead of the clock to salvage the British arm of the collapsed Silicon Valley Bank after it sent jitters through the startup scene of the country.

Investors are calling on the government to pull them out of distress as they have significant exposure to the troubled bank.

It should be noted here that SVB restructured its UK branch into a separate bank subsidiary in August last year following the branch reaching £100 million of insured small business deposits, SVB’s 2022 annual report showed. This put the bank directly under the jurisdiction of UK regulators.

Well, in the wake of recent developments, The Bank of England (BOE) said it would place the UK subsidiary into insolvency. “ SVBUK has a limited presence in the UK and no critical functions supporting the financial system,” the central bank said in a statement .

Following the insolvency procedure, SVB UK will stop making payments or accepting deposits.

Meanwhile, the UK finance ministry and BOE are working together to contain the chaos following SVB’s collapse. Interestingly, the government is coordinating an emergency meeting with tech firms.

City minister Andrew Griffith was also set to meet with industry representatives on Saturday afternoon, according to UK media outlet The Guardian . UK  Treasury said in a statement cited by Guardian:

“The government recognises that tech sector companies are often not cash flow positive as they grow, and that they rely on cash on deposits to cover their day to day costs.” 

On the other hand, the heads of 130 technology companies wrote a letter to UK Chancellor Jeremy Hunt asking for government intervention.

The CEOs criticized BOE’s assessment of the limited impact of SVB on the UK economy and added