March 12, 2023 14:20 | | 1 minute read
Over 200 UK companies in technology and life sciences are unable to pay their employees due to the financial crisis. Silicon Valley Bank (NASDAQ:SIVB) was shut down by regulators on Friday in what is now the largest US bank failure since 2008.
The prime minister said the bank closures pose no immediate danger to the UK’s financial system as a whole, but pose serious risks to some of the country’s most promising companies. Jeremy Huntreported by the BBC.
Hunt said the UK government is working on a plan to allow businesses to meet their cash flow needs and pay their employees “within the next few days”. Over 200 top executives signed a letter to Hunt asking for more government intervention to prevent him from becoming a trustee.
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“The price of doing nothing here means that these companies may fail in the short term, and their technology growth ambitions will fail in the long term,” they wrote.
Between 30% and 40% of UK startups employing up to 50,000 people could be affected by the SVB collapse.
“We need help by tomorrow,” Michael Moore, secretary-general of the UK Private Equity and Venture Capital Association, told the BBC. [Monday]“For technology companies and entrepreneurs.
As of Sunday, Silicon Valley Bank UK stopped accepting payments and deposits before going bankrupt. The move will allow individual depositors to receive up to £85,000 from the UK deposit insurance scheme. Any further protection would be a “serious moral hazard,” according to Undersecretary of the Treasury Nick McPherson.
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