Urgent plans are being drawn as much as “avoid or minimise damage” from the disruption threatened by the collapse of the UK arm of Silicon Valley Bank, Chancellor Jeremy Hunt has advised Sky News.
The cupboard minister stated the federal government was treating the difficulty as a “high priority”.
He is because of maintain talks with Prime Minister Rishi Sunak and the governor of the Bank of England Andrew Bailey this weekend.
The central financial institution introduced on Friday that Silicon Valley Bank UK was set to enter insolvency, following motion taken by its mum or dad firm within the US.
It was first reported by Sky News City editor Mark Kleinman
While Silicon Valley Bank (SVB) has a restricted presence within the UK and doesn’t carry out capabilities vital to the monetary system, it has been warned its collapse may have a big influence on tech start-ups.
Speaking to the Sophy Ridge On Sunday programme, Mr Hunt stated: “The Bank of England has made it very clear there isn’t a systemic threat to our monetary system, so folks ought to be reassured on that foundation.
“But there is a serious risk to our technology and life sciences sectors.
“It occurs to take care of the cash of a few of our most promising and thrilling companies.
“And so I want to reassure people, I’ve been in discussions over the weekend until late last night with the prime Minister, the governor of the Bank of England, many other people.
“And we’re working at tempo on an answer we’ll carry ahead very quickly plans to ensure persons are in a position to meet their cashflow necessities, pay their workers.
“But obviously what we want to do is to find a longer term solution that minimises or even avoids completely losses to some of our most promising companies.”
He added: “We will come forward with a solution that helps those very, very important companies with things like payroll and their cashflow requirements.
“But we additionally wish to put in place a long run resolution in order that their futures are safe.
“We’ve been working at pace over the weekend, the night, and the Prime Minister and I and the governor of the Bank of England absolutely determined to do everything we can to protect the future, these very, very important companies.”
Dom Hallas of the Coalition for a Digital Economy (Coadec) stated: “It is clear this could have a significant impact on the UK’s tech start-up ecosystem.
“In gentle of the priority and panic, I needed to share an replace on what we all know and the place we’re.
“We know that there are a large number of start-ups and investors in the ecosystem who have significant exposure to SVBUK and will be very concerned.
“We have been participating with the UK Government, together with Treasury and No 10, in regards to the potential influence and I do know that work has been occurring in a single day on coverage choices.”
SVBUK said it will be put into insolvency from Sunday evening.
It is a subsidiary of Silicon Valley Bank (SVB) and was the first location it opened outside the US.
The insolvency announcement came after SVB was put under US government control on Friday afternoon in the biggest failure of a US bank since the 2008 financial crisis.
The BoE said the company will stop making payments and accepting deposits.
The move will allow depositors to be paid up to £85,000 from the deposit insurance scheme.
A statement on the SVB website said: “We are saying that, following conversations with the Prudential Regulatory Authority, there’s an intention, barring any intervening occasion, to place Silicon Valley Bank UK Limited into insolvency from Sunday night.
“We are determined to work on the behalf of our clients and are proud of our employees in their engagement with you.
“If purchasers have any questions please get in contact with us and we’ll strive our greatest to reply any and all your queries.”