Silicon Valley Bank collapse: ‘Serious risk’ to tech sectors from failure, chancellor warns
British tech firms face a “serious risk” over the collapse of the UK arm of Silicon Valley Bank, the chancellor has warned, but said the government was “working at pace” to limit the damage.
Speaking to Sky News’ Sophy Ridge On Sunday programme, Jeremy Hunt said the government and the Bank of England were “absolutely determined” to do everything they could to help support the vital sector.
He had been in talks over the weekend with the prime minister and BoE governor Andrew Bailey to find a solution that ensured the cashflow of customers.
On an official trip to the US, Rishi Sunak told reporters the government was “working to recognise the anxiety” of businesses caught up in the crisis, but did not believe there was a “systemic contagion risk”.
The central bank announced on Friday that Silicon Valley Bank UK was set to enter insolvency, following action taken by its parent company in the US.
It was first reported by Sky News City editor Mark Kleinman.
While Silicon Valley Bank (SVB) has a limited presence in the UK and does not perform functions critical to the financial system, it has been warned its collapse could have a significant impact on tech start-ups.
Mr Hunt told Sky News’ Sophy Ridge On Sunday programme: “The Bank of England has made it very clear there is no systemic risk to our financial system, so people should be reassured on that basis.
“But there is a serious risk to our technology and life sciences sectors.
“It happens to look after the money of some of our most promising and exciting businesses.
“We are working at pace on a solution we will bring forward very soon plans to make sure people are able to meet their cashflow requirements, pay their staff.
“But obviously what we want to do is to find a longer-term solution that minimises or even avoids complete losses to some of our most promising companies.”
The US treasury has ruled out a major bailout
‘No systemic contagion risk’
Mr Sunak said: “We have been working through over the weekend.
“We don’t believe there is a systemic contagion risk.
“We’re working to recognise the anxiety and the concerns customers of the bank have and making sure we can work to find a solution that secures people’s operational liquidity and cash-flow needs. And that’s what the Treasury is working on.”
He added: “[There are] lots of different things they are looking at.
“Just rest assured they’re working through it over the weekend and are making sure there is a solution that provides operational liquidity for people’s cashflow needs.”
‘Government needs to offer more than warm words’
Labour’s shadow chancellor Rachel Reeves told Ridge: “I would urge the government to do more than offer warm words, but come forward with specific plans.”
Former Tory chancellor Lord Hammond said: “This is a very important dynamic sector and we don’t want to see it suffer a massive own goal here.”
Yellen rules out major bailout
Meanwhile, US treasury secretary Janet Yellen said she was working closely with banking regulators to respond to the collapse and protect depositors, but a major bailout was not being considered.
She told CBS News: “Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out…and the reforms that have been put in place means we are not going to do that again.
“But we are concerned about depositors and are focused on trying to meet their needs.”
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Dom Hallas of the Coalition for a Digital Economy (COADEC) said: “It is clear this could have a significant impact on the UK’s tech start-up ecosystem.”
SVBUK said it will be put into insolvency from Sunday evening.
It is a subsidiary of Silicon Valley Bank (SVB) and was the first location it opened outside the US.
The insolvency announcement came after SVB was put under US government control on Friday afternoon in the biggest failure of a US bank since the 2008 financial crisis.
The BoE said the company will stop making payments and accepting deposits.
The move will allow depositors to be paid up to £85,000 from the deposit insurance scheme.
In mid-May, the World Health Organisation assessed that there were “nearly half a million people in a catastrophic situation of hunger, acute malnutrition, starvation, illness and death”.
“This is one of the world’s worst hunger crises, unfolding in real time,” its report concluded.
Warning: This article contains images of an emaciated child which some readers may find distressing
Israel‘s decision this week to reverse the siege and allow “a basic level of aid” into Gaza should help ease the immediate crisis.
But the number of aid trucks getting in, so far fewer than 100 per day, is considered dramatically too few by aid organisations working in Gaza, and the United Nations accuses Israel of continuing to block vital items.
Israel-Gaza latest: Gaza enduring ‘atrocious death and destruction’, UN boss warns
“Strict quotas are being imposed on the goods we distribute, along with unnecessary delay procedures,” said UN secretary general Antonio Guterres in New York on Friday.
“Essentials, including fuel, shelter, cooking gas and water purification supplies, are prohibited. Nothing has reached the besieged north.”
Nineteen of Gaza’s hospitals remain operational, all of them are overwhelmed with the number of patients and a lack of supplies.
Baby Aya at Rantisi hospital in northern Gaza is dangerously thin
“Today, we receive between 300 to 500 cases daily, with approximately 10% requiring admission. This volume of inpatient cases far exceeds the capacity of Rantisi hospital, as the facility is not equipped to accommodate such large numbers,” Jall al Barawi, a doctor at the hospital, told us.
At least 94% of the hospitals have sustained some damage, some considerable, according to the UN.
Jall al Barawi, a doctor at Rantisi hospital
Paramedic crews are close to running out of fuel to drive ambulances.
The lack of food, after an 11-week blockade, has left thousands malnourished and increasingly vulnerable to surviving injuries or recovering from other conditions.
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Children are the worst affected.
Our team in Gaza filmed with baby Aya at the Rantisi hospital in northern Gaza. She is now three months old and dangerously thin.
Her skin stretches over her cheekbones and eye sockets on her gaunt, pale face. Her nappy is too big for her emaciated little body.
Aya’s nappy is too big for her emaciated little body.
Lethal spiral
Her mother Sundush, who is only 19 herself, cannot get enough food to produce breastmilk. Baby formula is scarce.
Aya, like so many other young children, cannot get the vital nutrition she needs to grow and develop.
It’s a lethal spiral.
This is what Aya looked like shortly after she was born
“My daughter was born at a normal weight, 3.5kg,” Sundush tells us.
“But as the war went on, her weight dropped significantly. I would breastfeed her, she’d get diarrhoea. I tried formula – same result. With the borders closed and no food coming in, I can’t eat enough to give her the nutrients she needs.”
“I brought her to the hospital for treatment, but the care she needs isn’t available.
“The doctor said her condition is very serious. I really don’t want to lose her, because I lost my husband and she’s all I have left of him. I don’t want to lose her.”
Read more:
British doctor in Gaza describes horror
Shouts of ‘genocide’ in Commons
Aya and her mother Sundush
Some of the aid entering Gaza now is being looted. It is hard to know whether that is by Hamas or desperate civilians. Maybe a combination of the two.
The lack of aid creates an atmosphere of desperation, which eventually leads to a breakdown in security as everyone fights to secure food for themselves and their families.
Only by alleviating the desperation can the security situation improve, and the risk of famine abate.
World
Police launch ‘major operation’ after 12 people injured in knife attack at Hamburg train station
Twelve people are reported to have been injured after a knife attack at Hamburg’s central train station.
A “major operation” has been launched and a suspect was arrested, police said in a post on X.
The identity of the suspect has not been revealed.
Reports in Germany said the suspected attacker was a woman.
The fire service said six of the injured were in a life-threatening condition, three others were seriously hurt, and another three sustained minor injuries, news agency dpa reported.
Bild newspaper said the motive for the attack was so far unknown.
Hamburg is Germany’s second biggest city, with the train station being a hub for local, regional and long-distance trains.
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The man suspected of shooting dead two Israeli embassy workers in Washington DC leaned over and fired at them repeatedly after they fell to the ground, the FBI has said.
Elias Rodriguez, 31, has been charged with murdering Sarah Milgrim and her boyfriend Yaron Lischinsky, after they left an event at the Capital Jewish Museum on Wednesday night.
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Footage has showed Rodriguez, from Chicago, chanting “free, free Palestine” as he was arrested.
It later emerged Mr Lischinsky had bought a ring and planned to propose to Ms Milgrim.
Authorities are investigating the killings as both a hate crime against the Jewish community and terrorism.
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Shootings suspect shouts ‘free Palestine!’
‘I did it for Gaza’
It comes as the FBI has said in a charging document on Thursday that surveillance footage shows how Ms Milgrim and Mr Lischinsky died.
Rodriguez is allegedly seen passing the couple after they left the museum before shooting them in the back.
The FBI says the footage then shows him leaning over the couple and firing at them several more times after they fell to the ground.
The video then shows Ms Milgrim attempting to crawl away before “(Rodriguez) followed behind her and fired again”, the charging document says.
The suspected gunman is then accused of reloading his weapon and firing at Ms Milgrim as she sat up.
According to the charging document, Rodriguez then jogged to the museum and once inside asked to speak to a police officer before stating that he “did it” and that he was unarmed.
He is then said to have told police: “I did it for Palestine, I did it for Gaza, I am unarmed.”
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DC shooting: Father pays tribute to ‘perfect’ daughter
Suspect ‘expressed admiration’ for fatal protest
The court document also states that 21 expended 9mm bullet cases were found at the scene and the gun was slide-locked – meaning it was empty of ammunition.
An empty gun magazine was also recovered from the scene.
The FBI says it has obtained travel records which show Rodriguez flew from Chicago’s O’Hare International Airport to the Reagan National in Washington DC on Tuesday with the gun in his checked baggage.
Rodriguez had bought the weapon in the state of Illinois on 6 March 2020, according to the charging document.
The FBI has said that while Rodriguez was in custody he “expressed admiration” for a US Air Force member who set himself on fire in front of the Israeli embassy in Washington DC on 25 February 2024.
Aaron Bushnell died in the apparent act of protest against the war in Gaza.
Rodriguez also told police he bought a ticket to the museum around three hours before the event that was attended by Ms Milgrim and Mr Lischinsky.
Read more:
Why Trump will worry about attacker being glorified
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Starmer ‘on wrong side of history’
During a brief court appearance at the E. Barrett Prettyman Federal Courthouse in Washington DC today, Rodriguez was charged with two counts of first degree murder and with the murder of foreign officials.
He has also been charged with causing the death of a person through the use of a firearm and discharge of a firearm during a crime of violence.
Rodriguez was told he could face life in prison or the death penalty if he is found guilty.
He remained calm throughout the hearing, paying attention to the proceedings throughout and confirmed that he is asking the court to appoint an attorney on his behalf.
He will next appear at a federal court in Washington DC on 18 June.
Murdered couple ‘were perfect for each other’
Meanwhile, Ms Milgrim’s father, Robert, says he feared his daughter might be in danger when he saw news alerts of a fatal shooting in Washington DC.
Ms Milgrim’s mother Nancy opened a phone locator app and saw Ms Milgrim was at the Capital Jewish Museum.
“Shortly after that, the Israeli ambassador called us on my wife’s phone,” Mr Milgrim told Sky News’ partner network NBC News, fighting back tears.
He added that it was the ambassador who told them Mr Lischinksy had bought a ring and was planning to propose to Ms Milgrim.
“They were perfect for each other, he said.
Mr Milgrim continued: “They just brought us joy, and her memory, which is a blessing, will continue to bring us joy – but it’s not the same as her not being here.”
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