Silicon Valley Bank UK to Be Bought by HSBC
Giant banking firm HSBC Holdings Plc (HSBA) is planning to buy Silicon Valley Bank's British unit. According to the filing released on 13 March, 2023, HSBC will acquire the firm for £1.
SVB UK collapsed, reeling from severe losses. The finance company had total debts of around £5.5 billion and had deposits of more than £6.7 billion until 10 March.
UK Government facilitated the Silicon Valley Bank sale
On Monday, the Bank of England also released an official statement regarding the matter. As per the statement, a number of other UK authorities were also involved. These included HM Treasury, the Prudential Regulation Authority, and the Financial Conduct Authority.
HSBC itself is regulated by the FCA and PRA, a fact which is likely help SVB UK recover from the losses. The statement issued by the Bank of England said that the step was taken to strengthen and stabilise the banking system of the United Kingdom.
The central bank statement added that the move would ensure the continuity of banking services, minimise disruption to the country's tech sector, and support.
The Bank of England also guaranteed that all depositors' funds with the collapsed bank would be secured after its sale to HSBC.
PM Rishi Sunak on the decline of SVB
The Bank of England released the official statement detailing plans for the sale of SVB UK just after Britain's Prime Minister Rishi Sunak assured the nation about the "sound" financial system of the country.
In talks with the media regarding the US bank's subsidiary's downfall, the Prime Minister said, "There's nothing to worry about."
He went on to add further reassurance that the country's financial health is "resilient" and would not be affected by the decline of SVB. The PM is currently in San Diego, where he will likely meet President Joe Biden.
Author: Wasay Ali
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