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Systemic risk exception announced for Signature Bank, Silicon Valley Bank UK sold 

The Bank of England, in consultation with the Prudential Regulation Authority, HM Treasury, and the Financial Conduct Authority, has decided to sell Silicon Valley Bank UK (‘SVBUK’), the UK subsidiary of the US bank, to HSBC UK Bank Plc. This action has been taken to stabilise SVBUK, ensuring the continuity of banking services, minimizing disruption to the UK technology sector, and supporting confidence in the financial system.The Bank confirmed 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. SVBUK staff remain employed by SVBUK. The wider UK banking system remains safe, sound, and well capitalised.

Meanwhile, The Federal Reserve Board has announced that Vice Chair for Supervision Michael S Barr is leading a review of the supervision and regulation of Silicon Valley Bank, in light of its failure. The review will be publicly released by May 1.

“The events surrounding Silicon Valley Bank demand a thorough, transparent, and swift review by the Federal Reserve,” said Chair Jerome H Powell.

Earlier, a joint statement was released by Secretary of the Treasury Janet Yellen, Federal Reserve Board Chair Jerome Powell, and FDIC Chairman Martin Gruenberg: “We are taking decisive actions to protect the US economy by strengthening public confidence in our banking system. After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer. We are also announcing a similar systemic risk exception for Signature Bank, New York, which was closed by its state chartering authority. All depositors of this institution will be made whole. Shareholders and certain unsecured debt holders will not be protected.”

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