The United States refuses to bail out the Silicon Valley bank

The United States refuses to bail out the Silicon Valley bank

And she promised that US authorities were eager to help the bank’s clients, who consist of everything from technology companies to wine producers.

“We want to make sure that problems at one bank don’t spread to others who are otherwise healthy,” Yellen said in an interview with CBS Sunday.

California authorities shut down Silicon Valley Bank (SVP) on Friday and placed it under bankruptcy protection. The British subsidiary of the bank also faced great problems, and in many countries there was fear of a major banking crisis.

The uncertainty surrounding what might happen has created panic not only among tech companies in California, but also among players beyond US borders. According to Bloomberg news agency, the US central bank, the Federal Reserve, along with the FDIC, will now consider creating some form of “emergency fund” that could help vulnerable business clients and mitigate further panic in the market.

As the 16th largest bank in the United States, SVN has operations not only in the United States, but also in Great Britain, China, Israel, Canada, Germany, Denmark and Sweden.

The British beware

British Finance Minister Jeremy Hunt said on Sunday that he was working with Prime Minister Rishi Sunak to avoid or at least limit the damage. The UK subsidiary, Silicon Valley Bank UK, has also been placed under bankruptcy protection.

In an interview with Sky News, Hunt warned that the UK’s tech sector is in “grave danger” following the banking collapse.

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SVB partners with many of the country’s leading technology companies, according to Hunt.

Most people may not have heard of Silicon Valley Bank, but it manages money for many of our promising companies, says Hunt.

At the same time, he emphasized that the head of the country’s central bank had made it clear that there was no danger to the country’s banking system as a whole.

180 British technology companies are calling on the UK government to intervene because “a loss of capital could set the sector back 20 years”. This was formulated in a letter to Hunt.

Sky News also reported that SVB had approached several large British banks such as Barclays and Lloyds with offers to buy the British subsidiary. It should be an offer that only lasts 24 hours.

North Market

SVB specializes in what is called venture capital. The bank has helped fund startups in the technology sector, which are becoming less attractive as interest rates rise.

– In the past three years, we have delivered 5 billion crowns on the Nordic market, Maria Ljungberg, who was to lead SVB’s operations in Sweden, tells Breakit.

The background to the collapse was the announcement on Wednesday that the bank would need $2.25 billion in new capital. SVB has invested much of its capital in US government bonds. Its value has decreased in line with the rise in interest rates. Consequently, the bank had to sell the bonds at a loss, and had to raise new capital to cover the balance.

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A number of investors responded to the news by withdrawing their money from the bank in a panic. On Thursday, the price fell 60 percent on the stock exchange, before the FDIC halted trading in the stock and chose to freeze the bank’s assets.

According to Agence France-Presse, investors are concerned that other banks may also experience problems as a result of the interest rate hike.

SEB analyst Thomas Itzen said Saturday E24 That Norwegians need not worry about their savings in the aftermath of the crash.

– There is no reason to worry about your savings in Norway. He says it’s not at the level we’re talking about.

Silicon Valley Bank (SVB) is expected to reopen Monday morning under a new name and under the control of the bank guarantee fund, the Federal Deposit Insurance Corporation (FDIC).

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Dalila Awolowo

Dalila Awolowo

"Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff."

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