UK races to minimize damage from Silicon Valley Bank collapse

LONDON, March 12 (Reuters) – British Chancellor of the Exchequer Jeremy Hunt said on Sunday he was working with Prime Minister Rishi Sunak and Bank of England Governor Andrew Bailey to “avoid or minimize damage” from the chaos engulfing Britain arm of Silicon Valley Bank (SIVB.O).

“We will put forward immediate plans to ensure that the short-term operational and cash flow needs of Silicon Valley Bank UK customers can be met,” Hunt said.

Friday’s dramatic failure of the US parent bank, which focuses on tech startups, was the biggest since the 2008 financial crisis.

Talks were held over the weekend involving Hunt, Sunak and Bailey to discuss the issues facing UK technology companies affected by the collapse, the UK Treasury said.

Hunt said the UK government was treating the issue as a “high priority” and said that given the bank’s importance to its customers, its failure could have a significant impact on some businesses.

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More than 250 chief executives of the British technology firm signed a letter addressed to Hunt on Saturday calling for government intervention, a copy seen by Reuters shows.

Under insolvency proceedings for UK banks, some depositors are entitled to up to 85,000 pounds ($102,000) in compensation for cash with lenders or 170,000 pounds for joint accounts.

Hunt echoed comments from the BoE that Silicon Valley Bank generally has a limited presence in the UK and does not perform functions critical to the financial system.

The BoE said on Friday it was seeking a court order to bring SVB UK into insolvency proceedings.

($1 = 0.8314 pounds)

Reporting by Andrew MacAskill; Editing by Frances Kerry and Hugh Lawson

Our standards: Thomson Reuters Trust Principles.

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