News

UK Tech Industry In Turmoil As Silicon Valley Bank UK Collapses, Emergency Cash Lifeline

Key Points:

  • Silicon Valley Bank UK (SVB UK) and its parent company collapsed, leading to a serious risk to the technology and life sciences sectors, which many of SVB UK’s customers belong to.
  • The UK government is drawing up plans for an emergency cash lifeline to help startups affected by the bank’s collapse. Chancellor Jeremy Hunt has called the issue a “high priority” and has been holding late-night meetings to avoid further fallout.
The collapse of Silicon Valley Bank UK (SVB UK) and its parent company has sent shockwaves throughout the UK tech industry, prompting the government to draw up plans for an emergency cash lifeline to help startups affected by the bank’s collapse, as per The Guardian.

Chancellor Jeremy Hunt has called the issue a “high priority” and has been holding late-night meetings with the prime minister and the Bank of England governor to avoid further fallout. While there is no systemic risk to the UK financial system, there is a “serious risk” to the technology and life sciences sectors, which many of SVB UK’s customers belong to.

The chancellor, Jeremy Hunt

The government has asked affected startups to disclose their cash on deposit at SVB UK, their monthly burn rate, and whether they have access to other bank accounts. Tech industry representatives have been summoned for an emergency meeting with Treasury officials, and there are hopes that the government will consider either reviving SVB UK through a state bailout or private takeover or offering specialized loans for startups at risk of going bust.

The collapse of Silicon Valley Bank – the 16th largest lender in the US – has left many businesses at risk of losing almost all their cash, with only £85,000 of clients’ deposits protected by the Financial Services Compensation Scheme.

This has the potential to cripple the UK tech industry, with many businesses at risk of falling into insolvency overnight. Britain’s biggest high street banks have been given a 24-hour deadline to rescue SVB UK from collapse, with lenders including Barclays and Lloyds Banking Group among those to have been approached by the board of SVB UK over the weekend.

While there is little chance of contagion across the banking sector, tech startups and investors are worried about the ripple effects for the sector.

The shadow chancellor, Rachel Reeves, has called for immediate action from the government to protect the UK’s startup sector, which drives growth and innovation across the economy. This is a crucial moment for the UK tech industry, and it remains to be seen what steps the government will take to prevent further damage.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Thana

Coincu News

Thana

I am a news editor at Coincu, where I produce daily editorial packages and manage the knowledge and review article sections. Before journalism, I earned a Bachelor's degree in Global Logistics and Supply Chain Management from Northampton University and studied news journalism at Press Association Training.

Recent Posts

Solana memecoins crash while DTX Exchange hits 100,000 TPS on layer-1 blockchain

Discover how DTX Exchange's historic achievement of 100,000 transactions per second on a layer-1 blockchain…

30 minutes ago

Strategic Bitcoin Reserve Expected to Cut 35% of US National Debt by 2049

VanEck suggests the U.S. could reduce its national debt by 35% by 2050 through a…

37 minutes ago

The New Lead of Presidential Crypto Council Appointed by Trump Is Bo Hines

President-elect Donald Trump named Bo Hines as the executive director of the presidential crypto council.

1 hour ago

Best New Meme Coins with 1000X Potential: BTFD Coin’s Hot BIG50 Discount As Baby Doge Coin, Dogs Takes Gaming to the Next Level

Explore the best new meme coins with 1000X potential. Learn how BTFD Coin leads with…

2 hours ago

BlockDAG Surges Past $170M as BDAG250 Bonus End Countdown Begins – Aave Targets $400 & Solana Shines with Scalability

BlockDAG crosses $170.5M in presale success with BDAG250 bonus and Whitepaper V3 launch! Solana grows…

4 hours ago

Qubetics Presale Price Surge Approaches: The Best Coins to Invest in Right Now While Toncoin, and XRP Gain Traction

Discover why Qubetics, Toncoin, and XRP are the best coins to invest in right now.…

4 hours ago

This website uses cookies.