UK says working to minimize damage from Silicon Valley Bank collapse

British Prime Minister Rishi Sunak said on Sunday the government was working to find a solution that would limit the potential impact on British businesses of the bankruptcy of US bank Silicon Valley Bank and its UK subsidiary.

Sunak told reporters that he understands “the anxiety and concerns of the bank’s customers”. He and the government are “making sure we can work to find a solution that guarantees operational liquidity and people’s cash flow needs,” he said.

Friday’s collapse of the SVB Financial Group, an institution focused on tech startups, was the biggest US bank failure since the 2008 financial crisis.

Potential parties interested in buying SVB’s UK subsidiary have been contacted, people familiar with the talks told Reuters.

The collapse could have a significant impact on British tech companies given the bank’s importance to some customers, UK Finance Minister Jeremy Hunt said earlier on Sunday.

“We’ve been working at a fast pace over the weekend, overnight,” Hunt told Sky News. “We’re going to come out with plans very soon to make sure people can meet their cash flow needs to pay their employees.”

Hunt said efforts are focused on finding a “long-term solution that minimizes, or even completely avoids, losses for some of our most promising companies.”

Hunt echoed comments from the Bank of England that, overall, Silicon Valley Bank had a limited presence in the UK and did not perform critical functions for the financial system.

Opposition Labor MP Rachel Reeves urged Hunt to offer more than “warm words” to businesses, saying the government had to come up with a plan by the time financial markets opened on Monday morning.

In the United States, the Federal Deposit Insurance Corporation (FDIC), which has been named as the bank’s trustee, was trying to find another institution over the weekend that would be willing to merge with the SVB, people familiar with it said. with the matter on Friday.

(Reporting by Andrew MacAskill and William Schomberg; Additional reporting by Elizabeth Piper, Lawrence White, Iain Withers, Baranjot Kaur and Sinead Cruise)