The UK Treasury and the Bank of England announced on Monday they had “facilitated the sale” of Silicon Valley Bank’s UK branch to HSBC, guaranteeing the safety of $8.1 billion in deposits. The announcement made that clear the sale of the bank had been made for a pound’s worth.
British authorities worked over the weekend to secure a buyer for the bank’s UK branch, which is based in California and went bankrupt last week.
“This morning the Government and the Bank of England facilitated a private sale from Silicon Valley Bank UK to HSBC,” Treasury Chief Jeremy Hunt said in a tweet.
“Deposits will be protected, without taxpayer support. I said yesterday that we would take care of our tech sector and we worked urgently to deliver on that promise,” she concluded.
Socks to put on cold clothes
The authorities of the United States and Europe tried this Monday to put a cold cloth on the situation after the closure of the Silicon Valley Bank decreed last Friday, which forced them to take unusual measures on Sunday to protect deposits after a busy weekend.
In a speech delivered from the Roosevelt Room of the White House minutes before the markets open, US President Joe Biden tried to send a message of security to his country. “Americans can rest assured that our banking system is secure. Your deposits will be there when you need them,” he said.
US authorities on Sunday unveiled sweeping measures to completely bail out clients’ money from the bankrupt California-based SVB, promising that other institutions will help meet customer needsalso announcing that regulators had shut down a second tech bank, Signature Bank of New York.
In a joint statement, financial agencies and the Treasury Department said SVB customers will have access to “all their money” from Monday, March 13, and US taxpayers will not pay for the disaster.
Silicon Valley Bank – the 16th largest in the US – was shut down because it broke a golden rule of banking: it ran out of money. In the news released by the New York Times, it was noted that it was the largest company to fail since the 2008 financial crisis which triggered the bankruptcy of the giant Lehman Brothers.
The bankruptcy left nearly $175 billion in customer deposits, including money from some of the biggest names in the high-tech world, under the control of the Federal Deposit Insurance Corporation.
Source: Clarin
Mary Ortiz is a seasoned journalist with a passion for world events. As a writer for News Rebeat, she brings a fresh perspective to the latest global happenings and provides in-depth coverage that offers a deeper understanding of the world around us.