Silicon Valley Bank

Chi Onwurah Excerpts

Monday 13th March 2023 Commons Chamber

[Andrew Griffith]

As my hon. Friend knows, the Government are seeking to support challenger banks to make sure we have a vibrant and competitive sector. That includes looking at issues such as the level of MREL—minimum requirement for own funds and eligible liabilities—and making sure that we have proportionate banking regulation that is relevant to the risk involved. He makes important points about the culture and capabilities of SVB UK, which is why it was so important that we had to very swiftly find it a home. I have spoken today to the chief executive of HSBC, as well as to the former chief executive of SVB UK. They are both enormously excited about the future. They see this as a platform for mutual growth, taking our brilliant life sciences and technology businesses international and to a new scale. The Government will not rest until we have mobilised capital to turn us into that science superpower.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

The Minister said, “The system worked.” Certainly, it was a huge relief that the estimated 50% of the UK tech sector that banked with SVB UK could today pay their suppliers and staff. However, surely that highlights the lack of diversity of capital available to the UK tech sector, and our dependence on the US. In the last two years, Silicon Valley Bank’s deposits tripled, but its exposure to Treasuries, and therefore to interest rate rises, went up ninefold. Is the Minister seriously saying that no one on this side of the Atlantic should have noticed that, and that it had no impact on what happened?

[Andrew Griffith]

The hon. Member talks about dependence on the US, but if that is her concern she should welcome this deal wholeheartedly, because we have taken a former subsidiary of a US business and made it part of a thriving and successful UK business.