8 C
Saturday, April 1, 2023

The Bank of England declared Silicon Valley insolvent and closes its subsidiary in the country

Must read

- Advertisement -

He bank of englandin coordination with the British Government, applied for a court order to declare insolvent the UK subsidiary of bankrupt US bank Silicon Valley Bank (SVBUK), so that its clients can collect deposits up to the limit guaranteed by the authorities. The BoE also issued a statement stating that SVB UK “will stop making payments or accepting deposits“.

- Advertisement -

Big British banks prepare to leave the UK

Big British banks prepare to leave the UK

Silicon Valley Bank: the effects of the bankruptcy continue

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

- Advertisement -

SVBUK’s other assets and liabilities “will be managed by bank liquidators” and what is recovered “will be distributed to its creditors,” a statement said.

The Bank of England clarifies that the Silicon Valley Bank UK, specializing in financing emerging technology companies“has a limited presence in the UK and has no critical functions within the financial system”.

On 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 North American bank, which ensures that it does not represent a threat to the British banking sector because it is well capitalized.

The second bank failure in US history

Silicon Valleythe sixteenth largest bank in USAcollapsed after depositors, mostly tech workers and venture capital-backed companies, they will rush to withdraw their money this week as anxiety spread regarding the financial health of the bank. It is the second largest bank failure in US history.

The bank had deep ties to industries and startups of Silicon Valley. Y Combinator, a startup incubator that has launched companies like Airbnb, DoorDash and Dropboxhas referred hundreds of entrepreneurs to the bank.

He California Department of Financial Protection and Innovation (DFPI) closed SVB and appointed the Federal Deposit Insurance Corporation (FDIC) as depositary of the funds of the bank, the federal agency reported Friday. The DFPI “took possession of the silicone Valley bankciting inadequate liquidity and insolvency,” said the Californian agency.

The bank’s 17 branches will reopen Monday under the control of a new entity specifically created by the FDIC to manage the institution’s operations.. In the short term, clients will be able to withdraw up to $250,000. The customers with the most money in the bankwho are the vast majority, were invited to contact the FDIC.

Source: Ambito

- Advertisement -

More articles


Please enter your comment!
Please enter your name here

- Advertisement -

Latest article