Regulators in the UK and Germany are monitoring the fallout from SVB Financial Group as a run on the firm prompted fears about the company’s future.
(Bloomberg) — Regulators in the UK and Germany are monitoring the fallout from SVB Financial Group as a run on the firm prompted fears about the company’s future.
The Bank of England’s Prudential Regulation Authority is monitoring the banking sector and wider market developments and is in close contact with the firms it supervises, according to a person familiar with the matter, who wasn’t authorized to speak publicly.
German financial regulator BaFin has the current developments “in view” and is “reflecting them in our continuing supervision,” a spokesman said.
Panic spread across the financial world as worries about the health of Silicon Valley Bank, a major lender to fledgling companies, prompted Peter Thiel’s Founders Fund and other prominent venture capitalists to advise portfolio businesses to withdraw their money, even as the bank’s top executive urged calm.
The lender’s stock, which tumbled 60% on Thursday, plunged an additional 63% in early trading Friday in New York before trading was halted.
SVB Germany’s latest financial disclosure for 2021 states that it is a “small, non-complex” institution not subject to capital requirements because of reliance on the parent company for capital and liquidity.
SVB’s UK subsidiary noted in a press release Friday that it is a “standalone banking institution” regulated and governed by the PRA.
“Silicon Valley Bank UK has been an independent subsidiary since August 2022 with a separate balance sheet to the SVB Financial Group and an independent UK Board of directors,” the release said, noting that funds from client deposits placed with it are managed in the UK.
Why SVB Was Hit By a Bank Run and Where It Could Lead: QuickTake
(Adds details of PRA stance.)
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