As per a Reuters statement on March 12, the Bank of London, a worldwide clearing institution, has made a formal proposal to purchase the United Kingdom subsidiary of Silicon Valley Bank.
The statement disclosed that a group of private equity firms, led by the Bank of London, has submitted a formal proposal to the Board of Silicon Valley Bank UK, as well as to the Prudential Regulation Authority at the Bank of England and His Majesty’s Treasury.
Earlier, Reuters reported that OakNorth Bank, which is owned by SoftBank, and Abu Dhabi Investment vehicle ADQ, were considering similar acquisitions of Silicon Valley Bank's UK arm.
British authorities have developed an emergency plan to assist startups and technology companies impacted by the collapse of Silicon Valley Bank. The rescue plan includes a cash infusion for several businesses.
Prime Minister Rishi Sunak stated that the government is working quickly to provide a plan in the next few hours that would secure operational liquidity and cash-flow needs for Silicon Valley Bank’s UK clients. The UK Treasury said in a statement that it will bring forward immediate plans to ensure the short-term operational and cash flow needs of Silicon Valley Bank UK customers are able to be met.
The Bank of England (BoE) suspended the operations of Silicon Valley Bank's branches in the UK on March 10, citing its limited presence and lack of critical functions supporting the financial system. However, more than 200 founders and CEOs of UK tech companies signed a letter claiming that many fintech firms relied on SVB for their banking operations and would face imminent insolvency unless action was taken.
According to reports, officials at the White House and U.S. regulators were working through the weekend to address the Silicon Valley Bank's collapse. While Treasury Secretary Janet Yellen said during an interview that a major bailout was not being considered, measures to protect investors were being taken.
The U.S. Federal Deposit Insurance Corporation has reportedly initiated an auction process for Silicon Valley Bank, with bids set to be open for a few hours before the process closes on March 12.