London, (Samajweekly) The UK government is working on a plan so that UK tech firms caught up in the collapse of Silicon Valley Bank (SVB) won’t run out of cash, it has said, the media reported.
The Treasury said it wanted to “minimise damage to some of our most promising companies in the UK” after the US bank’s failure last Friday, BBC reported.
US regulators shut down the bank on Friday in what is the largest failure of a US bank since 2008.
The bank’s UK subsidiary will be put into insolvency from Sunday evening, BBC reported.
UK Prime Minister Rishi Sunak, Chancellor Jeremy Hunt and Bank of England Governor Andrew Bailey have been holding talks over the weekend in response to the collapse of SVB UK.
The Treasury said on Sunday morning that the issue is a “high priority”.
It said the bank’s failure could hit UK tech companies hard, and that it was “working at pace” on a solution.
It added it would “bring forward immediate plans to ensure the short term operational and cashflow needs of Silicon Valley Bank UK customers are able to be met”, BBC reported.
More than 250 bosses of UK tech firms signed a letter addressed to Hunt on Saturday calling for government intervention.
SVB collapsed in the US after failing to raise $2.25bn to plug a loss from the sale of assets, mainly US government bonds, that were affected by higher interest rates.
Its troubles prompted a run on the bank in the US and sparked investor fears about the general state of the banking sector, BBC reported.
SVB specialised in lending to early-stage businesses, and the company banked nearly half of US venture-backed technology and healthcare companies that listed on stock markets last year.
