The British-Asian HSBC will take over the British unit of the now closed American Silicon Valley Bank (SVB). This was announced by the British Ministry of Finance on Monday morning. First, the "Financial Times" had reported about it. HSBC claims to pay the symbolic price of one pound for the SVB unit. For the transaction, which was carried out with the support of the Bank of England, no taxpayers' funds would have to be used, the Ministry of Finance stressed. The deposits of SVB customers are fully protected. They could fall back on this and on the services of their bank as early as this Monday.
"This acquisition makes strategic sense for our business in the UK," said HSBC CEO Noel Quinn. "HSBC is the largest bank in Europe and SVB UK's clients should be assured of its strength, protection and security," said UK Chancellor of the Exchequer Jeremy Hunt. Meanwhile, the U.S. Federal Reserve, the U.S. Treasury and the U.S. Deposit Insurance Administration (FDIC) announced that SVB's clients will have access to their deposits starting Monday. US taxpayers should also not have to bear any losses in connection with the solution for the SVB.
Shockwaves around the globe
The collapse of the bank, which specialises in start-up finance, has triggered fears of a new banking crisis around the world. The biggest collapse of a bank since the global financial crisis of 2008 caused crisis meetings of politicians and regulators over the weekend, especially in the US and Great Britain. This Monday, the Fed is meeting for an emergency meeting. After the closure of the institute by the supervisory authority, it should be prevented that further companies are affected.
SVB and its UK subsidiary specialised in financing technology companies. The bank's collapse is also putting pressure on startups that are now struggling to pay their employees. Experts blame the sharp interest rate hikes in the US for the SVB's problems. After the collapse, markets in Asia failed to agree on a common direction on Monday, but bank stocks remained under strong selling pressure.
Concerns about financial stability are so great that investors speculated that the Fed would now be reluctant to raise interest rates by 50 basis points later this month. Given the stress in the banking system, Goldman Sachs analysts no longer expect the central bank to raise interest rates at its next meeting on March 22.