10 March 2023

Silicon Valley Bank – 1 of 5 Insights

Our response to market concerns and recent announcements regarding SVB

In response to the current situation with Silicon Valley Bank (SVB), we have assembled a multi-disciplinary team of sector experts to support our clients, contacts and the wider ecosystem participants.

We are proactively communicating with market stakeholders across the investor, operator and regulator communities to gather information and provide contextualised, practical advice in this fast-developing situation. 

Many companies and founders are concerned about availability of credit lines and day-to-day decisions involving cash management, and potentially also significant cash deposits held with SVB or Silicon Valley Bank UK. In addition to having those concerns in relation to their portfolio companies, institutional investors are also concerned about their own cash deposits, practical considerations around managing risk and the concerns of their LPs in the current situation. We are alive to the multitude of contractual terms that many of our clients are currently navigating and seeking to balance with the wider commercial risks they may face as this situation develops.

On Friday 10 March 2023, the Federal Deposit Insurance Corporation was appointed as receiver for SVB in the US.  Silicon Valley Bank UK had previously issued a separate statement noting that it is a separately regulated bank with a separate balance sheet. However, that statement has since been removed and at 22:31 on Friday 10 March 2023, Reuters reported that the PRA (The Prudential Regulation Authority), which oversees the bank’s UK arm, believes it cannot be a viable standalone operation following SVB’s takeover by US regulators. The Bank of England has now formally announced that it intends to apply to court to put SVB UK into a bank insolvency procedure, and suggests this will be a liquidation process.

Please reach out to your usual Taylor Wessing contact, or email our team if you have any queries or concerns about the ongoing situation, either in the UK or internationally. 

Join our webinar on Monday 13 March, as our experts share their knowledge and address some of the issues arising from the current situation.

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