UK begins insolvency proceedings for Silicon Valley Bank UK

The Bank of England, in coordination with the British Government, has requested this Saturday a court order to declare the subsidiary in the United Kingdom of the bankrupt American bank Silicon Valley Bank (SVBUK) insolvent, so that its clients can collect deposits up to the limit guaranteed by the authorities.

The central bank has reported that the declaration of insolvency will mean that the Financial Services Compensation Program (FSCS) will be able to pay depositors as soon as possible up to the protected maximum of 85,000 pounds (96,000 euros) or double for joint accounts.

The other assets and liabilities of the SVBUK "will be administered by bank liquidators" and what is recovered "will be distributed to your creditors"stated in a statement.

The Bank of England qualifies that Silicon Valley Bank UK, specialized in financing emerging technology companies, "has a limited presence in the UK and has no critical functions within the financial system".

In another note, the Ministry of Economy has explained that it is in close contact with the central bank to "minimize" the effect in this country of the bankruptcy of the American bank, which ensures that it does not represent a threat to the British banking sector because it is well capitalized.

Together with the Ministry of Science, Innovation and Technology, they will speak this afternoon with representatives of the national companies affected by the fall of the entity, the statement says.

Financial regulators in the United States announced on Friday the closure of Silicon Valley Bank due to lack of liquidity and ordered measures to also guarantee the protection of all its insured deposits.

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The bank revealed on Wednesday that it was going to seek a capital increase to face its financial difficulties, which had led it to get rid of investments for about 21,000 million dollars, with a loss of 1,800 million.

That announcement led many clients to withdraw their funds and plunged its stock price, which in turn affected the banking industry globally.


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