LONDON – Britain’s Finance Ministry and the Bank of England are working to minimise the disruption that could arise from a collapse of the United Kingdom arm of the US-headquartered Silicon Valley Bank (SVB), which has been seized by United States regulators, the ministry said on Saturday.
Talks were scheduled for Saturday to discuss the issues faced by British technology companies affected by the collapse, the ministry said in a statement.
The Bank of England on Friday said it was seeking a court order to place SVB UK in an insolvency procedure.
“The government recognises that tech sector companies are often not cash flow-positive as they grow, and that they rely on cash on deposits to cover their day-to-day costs,” the statement said.
Advisory firm Rothschild & Co is exploring options for SVB UK as insolvency looms, two sources familiar with the discussions told Reuters.
More than 250 British tech company chief executives signed a letter addressed to Mr Jeremy Hunt, the Chancellor of the Exchequer, or Finance Minister, calling for government intervention, a copy seen by Reuters shows.
“The recent news about SVB going into insolvency represents an existential threat to the UK tech sector,” the letter said.
“This weekend the majority of us as tech founders are running numbers to see if we are potentially technically insolvent.
“Most businesses are operating on very fine margins in the current economy and the contagion from the initial insolvencies will be vast and impact the economy far beyond the tech sector.”
