13 March 2023 , 07:11
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Jeremy Hunt has announced the UK arm of the US bank Silicon Valley Bank has been sold to HSBC as part of a rescue deal.
The Chancellor said customers of the bank - including many tech firms - will be able to access their deposits and banking services as normal today.
Confirming the deal before the markets opened on Monday, Mr Hunt said the Government had "facilitated a private sale" involving "no taxpayer support".
The Bank of England stressed that all deposits are now "safe and secure".
Over the weekend he had warned there was a "serious risk" to the UK's technology and life sciences sectors as a result of the collapse of Silicon Valley Bank.
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But he insisted there was no "systemic contagion risk" to the rest of the UK's financial sector.
The Shadow Chancellor Rachel Reeves said the news will be "a relief to the entrepreneurs and the thousands of people working in the tech and start-up sectors, who woke up facing huge uncertainty this morning".
She added: "Tech and life sciences are vital to getting our economy growing again."
In a statement on Monday, Mr Hunt said: “The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs.
The Government announced the sale of the UK arm of the Silicon Valley Bank on Monday (AP)"I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.
“Today the government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order.
“HSBC is Europe’s largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them.”
Rishi Sunak told broadcasters: “The first thing to say is just echo the comments of the Chancellor made and the Bank of England governor made about the resilience of our financial system at home.
“The fact that our banks are well capitalised, the liquidity is strong. I think the Bank of England governor was right and the chancellor was right to address this and make it clear that actually our banks are well capitalised and they don't have any concerns about systemic risk.
"And as we've seen, over the weekend, we've been able to resolve the issue of Silicon Valley Bank which are important to our economy, they make me look forward to the future with confidence now, having access to the resources by HSBC to help grow their businesses and continue to provide jobs across the UK. So it's been, it's been a good outcome.”
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A Bank of England statement added: This action has been taken to stabilise SVBUK, ensuring the continuity of banking services, minimising disruption to the UK technology sector and supporting confidence in the financial system.
"The Bank and HMT can confirm that all depositors' money with SVBUK is safe and secure as a result of this transaction.
"SVBUK's business will continue to be operated normally by SVBUK. All services will continue to operate as normal and customers should not notice any changes.
"Customers can continue to contact SVBUK through the usual channels and borrowers should make any loan repayments to SVBUK as normal. SVBUK staff remain employed by SVBUK, and SVBUK continues to be a PRA/FCA authorised bank."