Silicon Valley Bank fallout spreads around world from London to Singapore
- Founders are warning that the bank’s failure could wipe out start-ups around the world without government intervention
- Tech leaders across the globe are scrambling to assess potential ramifications, come up with temporary fixes
The fallout from the collapse of Silicon Valley Bank (SVB) is beginning to spread around the world, with Friday’s dramatic failure of the US parent bank, which focuses on tech start-ups, the biggest since the 2008 financial crisis.
Start-up founders in California’s Bay Area are panicking about access to money and paying employees. Fears of contagion have reached Canada, India and China. In the UK, SVB’s unit is set to be declared insolvent, has already ceased trading and is no longer taking new customers.
On Saturday, the leaders of more than 250 tech companies sent a letter calling on UK Chancellor Jeremy Hunt to intervene. “The loss of deposits has the potential to cripple the sector and set the ecosystem back 20 years,” they said in the letter. “Many businesses will be sent into involuntary liquidation overnight.”
On Sunday, Hunt said he was working with Prime Minister Rishi Sunak and Bank of England Governor Andrew Bailey to “avoid or minimise damage” resulting from the chaos engulfing the UK arm of the bank.
“We 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,” Hunt said.
This is just the beginning. SVB had branches in China, Denmark, Germany, India, Israel and Sweden, too. Founders are warning that the bank’s failure could wipe out start-ups around the world without government intervention.