The fallout from the run on the Silicon Valley Bank in California went international overnight, with British and European Union lenders seeing nearly £30 billion wiped off their portfolios and the Bank of England stepping in to take over the insolvency process for the British arm of SVB to protect the deposits of British firms tied to the bank.
Since Friday, the Stoxx Europe 600 banks index, which also includes leading British lenders, saw a mass sell-off in the wake of the collapse of the Silicon Valley Bank, the largest American bank failure since the 2008 financial crisis. In total, the European-UK banking index saw a one-day decline of 3.8 per cent, with €33.5 billion (£29.6/$35.6 billion) being wiped off their balance sheets.
Some of the United Kingdom’s largest banks saw their shares fall significantly, with HSBC declining by 4.6 per cent, Lloyds Banking Group falling by 3.3 per cent, and shares in NatWest going down by 2.5 per cent, The Times of London reports.
British-based investors in SVB have already reportedly failed to withdraw their funds from the UK-based branch of the investment bank, sparking fears that tech start-ups could potentially go under if the government doesn’t intervene to save the bank.
The British tech start-up lobby group said that there is a sense of “panic” among its members, with executive director Dom Hallas saying: “We know that there are a large number of start-ups and investors in the ecosystem who have significant exposure to SVB UK and will be very concerned.
Bank of England statement on Silicon Valley Bank UK 👇 pic.twitter.com/62snFTF2Wj
— Bank of England Press Office (@BoE_PressOffice) March 10, 2023
Treasury Secretary Janet Yellen said during a House Ways and Means Committee hearing Wednesday that the government continues to monitor the Silicon Valley Bank crisis. t.co/rUH1tECtM3
— Breitbart News (@BreitbartNews) March 11, 2023