- British startups are celebrating, as HSBC announces its acquisition of the United Kingdom branch of the now-defunct Silicon Valley Bank. The Bank of England and the British government facilitated the deal, which saw HSBC take over the U.K. unit for a nominal fee of £1 ($1.21). This move provides a financial lifeline to U.K. startups, ensuring their deposits are safe in the hands of Europe's largest bank.
- SVB UK was on the brink of insolvency following the downfall of its American parent firm, prompting the government, Bank of England, and other stakeholders to take action in order to stop the ripple effect on the tech industry. Over 200 tech companies had implored the government to intervene, sending a letter on Saturday.
Why it matters
The potential failure of SVB could lead to a wider fear that further banks may be facing difficulties. Signature Bank has also been shut down. In a joint announcement on Sunday, the Federal Reserve, Treasury Department, and Federal Deposit Insurance guaranteed that all depositors would be compensated.
