Michael McGrath welcomes acquisition of Silicon Valley Bank's UK arm by HSBC

Thomson Reuters

Minister for Finance Michael McGrath has welcomed the acquisition of the British arm of the collapsed Silicon Valley Bank by HSBC.

Speaking before a meeting with euro zone finance ministers in Brussels on Monday, Mr McGrath said it was still "early days" with respect to seeing the impact of the collapse of the bank.

HSBC bought the UK arm of collapsed US lender in a last-minute rescue deal to avert a crisis in the European technology sector.

The sale – for a nominal sum of £1 – was agreed after all-night talks between the British government and the Bank of England to try to secure a sale of Silicon Valley Bank UK amid fears that the tech sector would have been thrown into chaos amid the fallout from the failure of the California-based lender.

British finance minister Jeremy Hunt warned that some of the UK’s leading tech companies could have been “wiped out” if a solution had not been found after Silicon Valley Bank went bust last Friday.

But he confirmed that all customer deposits have been protected under the sale to HSBC, with no taxpayer cash involved.

Customers and businesses, who had been left unable to withdraw money since the Friday collapse, are now able to access cash as normal, he added.

The US government also moved to stop a potential wider banking crisis after the failure of Silicon Valley Bank – the largest failure of a bank since the 2008 financial crisis – by stepping in to protect all customer deposits.

It came as the spread began to take hold, with regulators announcing that New York-based Signature Bank had also failed and was being seized on Sunday. – Additional reporting: PA