Silicon Valley Bank: Bank of London Submit Proposal for UK Arm
Bank of London has submitted a proposal to Silicon Valley Bank UK, the company said in a statement on Sunday. It added that the proposals have been sent to British authorities, including the Treasury and the Bank of England.
Bank of London, a clearing bank, is leading a consortium of investors including private equity funds, which has submitted what it described as formal proposals.
“Silicon Valley Bank cannot be allowed to fail given the vital community it serves,” Bank of London co-founder and Chief Executive Officer Anthony Watson said in a statement.
“This is a unique opportunity to ensure the UK has a more diversified banking sector, whilst allowing continuity of service to SVB’s UK client base,” he said. Unlike other financial institutions, Bank of London does not lend and holds all of its deposits with the Bank of England.
Advisory firm Rothschild & Co is exploring options for the subsidiary, as insolvency looms, two people familiar with the discussions told Reuters on Saturday. The BoE has said it is seeking a court order to place the UK arm into insolvency.
SVB Financial Group which focuses on tech startups, became the biggest bank collapse since the 2008 financial crisis, rocking global markets, sending stocks tumbling and leaving tech founders uncertain that they would be able to pay their staff.
A number of financial industry executives and investors have warned the collapse of the bank could have a domino effect on other banks if regulators did not find a buyer over the weekend to protect uninsured deposits.
On Sunday, Britain’s Finance Minister Jeremy Hunt said he was working with Prime Minister Rishi Sunak and Bank of England Governor Andrew Bailey to “avoid or minimise damage” resulting from the chaos engulfing SVB’s UK arm.
More than 250 UK tech firm executives signed a letter addressed to Hunt on Saturday, calling for government intervention and warning of an “existential threat” to the UK tech sector. Naira Steadies as Banks Issue Update on FX Purchase
