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Bank of England seeks to end UK branch of Silicon Valley Bank


Olivier Douliery | AFP | beautiful pictures

The Bank of England said on Friday that it was seeking a court order to bring Silicon Valley Bank UK Limited into bankruptcy proceedings, after US regulators took over its parent company, SVB Financial Group, at the beginning of the day.

“SVB UK has a limited presence in the UK and no critical functions support the financial system. In the interim, the company will stop making payments or taking deposits,” the BoE said.

Under bankruptcy proceedings against banks in the UK, some depositors are eligible for compensation of up to £85,000 ($102,000) for lost deposits or £170,000 for joint accounts. .

The BoE said other assets and liabilities would be managed by the bank’s liquidators and any money recovered would be passed on to creditors.

Bank failures are rare in the UK, with only two lenders undergoing BoE settlement proceedings since 2009.

Earlier on Friday, the Financial Times reported that SVB’s UK arm had sought £1.8 billion of liquidity from the BoE through a discount window facility, providing emergency funding to banks if they have enough collateral.

UK Silicon Valley Bank said earlier on Friday that it is an independent entity with an independent board of directors, protected by the parent company and other subsidiaries.

US banking regulators took over parent SVB earlier on Friday in a bid to protect depositors following the biggest banking crash since the financial crisis that saw the global banking industry lose its banks. billion dollars in market value.

SVB’s share decline, which began on Thursday, has spread to other US and European banks. According to Reuters calculations, US banks have lost more than $100 billion in stock market value and European banks have lost another $50 billion in value over the past two days.

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