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UK businesses will not be affected by the collapse of a major technology-focused bank, Rishi Sunak promised as the Treasury Department scrambled to avert a crisis in the city.
Silicon Valley Bank (SVB), which is heavily involved in funding start-ups, closed in the US on Friday and its UK division closed over the weekend.
The collapse has raised concerns that companies may not be able to draw on their reserves and may even be forced to close.
But when he traveled to San Diego, California, for a summit with US and Australian leaders, the prime minister dismissed suggestions that there was a “systemic risk of infection” from SVB.
Mr Sunak told reporters: And that’s what the Treasury Department is working on. ”
He added: There are many different things they are looking at. Rest assured they are working on the weekends. ”
The Prime Minister argued that Britain’s financial regulatory regime, overseen by Bank of England Governor Andrew Bailey, was fit for purpose.
This comes after Prime Minister Jeremy Hunt said on Sunday morning that the government was “working in pace” to limit the damage from the bank collapse.
he told Sky’s sophie ridge on sunday He met with Mr. Sunak and Mr. Bailey “until late last night” to find a solution, and they had an “absolute determination” to protect the company.
Mr Hunt said:
“But there are serious risks in our technology and life sciences sector. We happen to be managing funding for some of the most promising and exciting businesses.”
Hunt added that the Treasury Department “will soon submit a plan to help people meet their cash flow requirements.”
Labor has called on the government to offer more than “warm words” to British businesses affected by the SVB collapse.
“When the markets open tomorrow morning, many businesses in the UK will be wondering how they can pay their staff wages and how much deposits they will have with Silicon Valley Bank and their funding arrangements are still in place,” she said. told Sky News.
“I would like to strongly urge the government not only to send warm words, but also to present a concrete plan.”