Silicon Valley Bank

Paula Barker Excerpts

Monday 13th March 2023 Commons Chamber

[Andrew Griffith]

My hon. Friend knows a great deal about the sector, and it is due to past reforms that we were able to take this decisive action. Parliament has given—in extremis, and with the agreement of the Bank of England, the PRA, the FCA and the Treasury—sweeping powers to enable this sort of transaction to happen at great pace. Let me be clear that it is the shareholders and creditors of the bank, not depositors or the taxpayer, who have lost. In the system that we have, that is the right outcome, and I am pleased we were able to achieve it.

The Edinburgh reforms are designed to give this country the ability to continue to grow and to be internationally competitive with other markets, while adhering to the highest quality regulatory standards, and with the UK at the absolute cornerstone of organisations such as the Financial Stability Board. They will not put any more jeopardy into the financial system. Indeed, having good healthy businesses that grow and are profitable is the best way to avoid jeopardy.

[Paula Barker (Liverpool, Wavertree) (Lab)]

First pension funds and liability driven investments, now the collapse of SVB UK. Is it not time for a systematic review of the risks that sharply rising interest rates pose to the UK financial sector?

[Andrew Griffith]

With the greatest of respect to the hon. Lady, the issue here was a subsidiary of a US bank, and I will not be commenting on US policy, interest rates or anything else from this Dispatch Box. The important fact is that we were able to restore the bank to viability and, over a small number of hours and days, to find a successful buyer. We did that because of the strength of the UK regulatory system, and because of the conviction of this Prime Minister and this Chancellor that this is a critical sector, and one of the ways that we will continue to grow the UK economy.