More than 200 UK firms are ‘seriously at risk’ from the collapse of Silicon Valley Bank.

At least 200 UK tech companies are “seriously at risk” from the collapse of Silicon Valley Bank’s UK arm.

Rishi Sunak and the Chancellor held emergency talks with Bank of England Governor Andrew Bailey this weekend to find a lifeline for affected businesses if the bank defaults.

Meanwhile, a number of potential buyers are circling the failed lender.

Banking giants HSBC and JP Morgan were among several parties considering buying the bank’s UK operations, Sky news reported. Both declined to comment.

Oaknorth Bank, a lender founded by former Tory donor Rishi Khosla, was also in takeover talks.

According to information, there was also interest from the Bank of London and the state-backed investment vehicle ADQ from Abu Dhabi Heaven.

Talks were understood to have continued into the evening as officials scramble to find a buyer before the bankruptcy deadline.

A survey of 31 venture capital funds holding thousands of investments in UK technology and science companies found that 34 per cent of their portfolio companies – 336 in total – have bank accounts.

More than 200 of them are now at short or long-term cash flow risk, according to data from BVCA — the industry body that represents venture capital investors.

About £2.5 billion of capital from these companies is tied up with the lender.

Mr Hunt said the Government was “working at pace” to limit the damage and would come up with a plan to help the “cash flow” needs of the bank’s UK customers.

“The Bank of England has made it very clear that there is no systemic risk to our financial system,” he told Sky News. Sophy Ridge on Sunday. “But there is a serious risk to our technology and life sciences sectors.”

Mr Hunt added: “We are working flat out on a solution, which we will be putting forward with plans very soon, to ensure people are able to meet their cash flow needs and pay their employees.”

Labour’s shadow Chancellor Rachel Reeves urged Mr Hunt to say more than “warm words” to companies – and called for the Chancellor to come up with a plan by the time the market opens on Monday.

she said sky news: “When the markets open tomorrow morning, many companies in the UK will not know how to pay their employees’ wages and whether their deposits with the Silicon Valley Bank and their financing arrangements are still in place.”

She said she was “slightly concerned” by the urgency shown by Mr Hunt, adding: “I would urge the Government to do more than just say warm words but come up with concrete plans.”

It comes as CEOs of 140 leading UK startups wrote to Mr Hunt on Saturday demanding immediate government action.

“This weekend most of us as tech founders run numbers to see if we might be technically insolvent.

“The impact of this is far greater than our individual businesses. The Bank of England’s assessment that SVB’s insolvency would have only a limited impact on the UK economy shows a dangerous lack of understanding of the sector and the role it plays in the wider economy, both now and in the future.”

“Most companies are operating on very tight margins in the current economic climate, and the contagion from initial bankruptcies will be huge, impacting the economy well beyond the tech sector.”

Speaking to reporters accompanying him to the US, Mr Sunak said the government “does not believe there is a systemic risk of contagion”. The Prime Minister declined to “enter speculation” as he pressed on whether a contingency plan to cover deposits would be considered.

Chancellor and Prime Minister to hold talks with Bank of England over bank failure


The Bank of England announced on Friday that Silicon Valley Bank UK will file for bankruptcy as a result of actions by its parent company in the US. SVBUK said it would be sent into bankruptcy from Sunday night.

Although the SVB has a limited presence in the UK and does not perform any functions critical to the financial system, its collapse could have a significant impact on tech start-ups.

In a statement released on Sunday morning, the Treasury said it was treating the issue “with high priority” and said the government was “working at pace towards a solution to avoid or minimize damage to some of our most promising businesses in the UK”. .

The Treasury said it would put forward immediate plans to ensure “the short-term operational and cash flow needs of Silicon Valley Bank UK’s clients can be met”.

It added that the government recognizes that the bank’s collapse “could have a significant impact on the liquidity of the tech ecosystem.”

Asked if the government would use taxpayers’ money to provide support, Mr Hunt said he “didn’t want to get into the solution”. The Chancellor said he wanted to “find a longer-term solution that would minimize or even avoid losses for some of our most promising companies.”

Mr Sunak said the government recognizes the “fears and concerns of the bank’s customers” and “ensure we can work to find a solution that secures people’s operational liquidity and cash flow needs”.

Supporting the Bank of England governor, the Prime Minister said “yes” when asked if Mr Bailey oversees a robust regulatory environment for UK banks.

Chancellor Jeremy Hunt is working on an emergency plan


Former Tory Chancellor Philip Hammond said the Bank of England “must provide significant and additional liquidity to anyone who buys the SVP”.

He said it was vital to protect the UK’s growing fintech sector. “This is a very important dynamic sector and we don’t want him to suffer a massive own goal here.”

The bankruptcy announcement came after SVB was placed under US government control on Friday afternoon in the biggest US bank failure since the 2008 financial crisis.

The Bank of England said the company will stop making payments and will no longer accept deposits. The move allows depositors to be paid up to £85,000 out of the deposit guarantee scheme.

The US government was expected to make a “significant” announcement on Sunday to prop up deposits at Silicon Valley Bank and prevent further consequences, sources familiar with the matter told Reuters.

Officials in the Joe Biden administration have been working all weekend to assess the fallout of the dramatic bank collapse, the largest since the 2008 financial crisis, with a particular focus on the venture capital sector and regional banks, the sources said early Sunday.

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