‘It was frantic’: the scramble to save SVB UK and avert a banking crisis
From the moment Silicon Valley Bank collapsed on Friday afternoon, banking regulators knew they had just two days to shore up confidence and prevent contagion spilling over in the UK.
In offices, spare bedrooms and kitchens across the UK, it was all hands to virtual battle stations as a small army worked through the weekend and well into the early hours of Monday morning to try to salvage the UK arm of the tech lender – or risk turmoil when markets opened.
Ministers, senior regulators and banking executives were running on fumes by the time the deadline approached as they raced to avert a cash crunch that could paralyse start-ups across the UK. The collapse of the California-headquartered bank risked starving its 3,500 UK customers – largely tech firms – of cash, and spooking the wider banking sector.
Bidders, including HSBC and fledgling lender Bank of London, fielded phone and video calls almost every 20 minutes in the middle of the night as officials from the Bank of England and the Treasury officials, and SVB UK’s own bosses, tried to hash out details of how their respective takeovers could be executed before the London market opened.
“It was frantic”, one person involved in overnight negotiations said. “But it wasn’t frantic as in ‘We can’t solve the problem’. It was frantic because we had until 7am to solve this problem.
“It was all hands on battle stations. Everyone was moving so quickly.”
The weekend scramble to rescue Silicon Valley Bank UK (SVB UK) revived memories of the 2008 financial crisis, when regulators had to race to prevent the collapse of Lehman Brothers and a run on bust lender Northern Rock infecting several of Britain’s biggest banks, ushering Halifax Bank of Scotland into the hands of Lloyds and
Read more on theguardian.com
