From the UK side, HSBC is taking on Silicon Valley Bank’s UK unit and banking facilities are now restored and fully operational.
This is absolutely excellent news for this vital sector, after a commendable night of work from the UK government, Bank of England and their advisors to resolve the situation. It’s probably the best outcome we could have hoped for and delivered in very short order.
A bank run is never a pretty thing and is of course the ultimate expression of market jitters. Make no mistake, the collapse of SVB was a very serious risk of contagion and a direct threat to a whole host of fintech businesses.
The key impact of the SVB collapse is perception of the health of the fintech sector as an extension of the tech sector.
Fintechs need access to working capital while they build and move towards adoption – then they take skyward and become profitable or acquired at pace.
The events of the last few days will have a long impact on the reputation of and sentiment towards the fintech sector more broadly adding to the pressures of an already challenging funding environment.
So a communal sigh of relief. Maybe it’s time to rebrand the UK arm – Silicon Roundabout Bank anyone?
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