Background
Silicon Valley Bank UK was the ring-fenced British subsidiary of the Californian lender at the centre of the March 2023 US regional banking crisis. When the parent was closed by US authorities on 10 March 2023 after a catastrophic deposit run, the UK subsidiary — solvent on its own balance sheet but dependent on the franchise — faced immediate deposit flight concentrated in technology and venture-backed companies.
From insolvency to resolution
The Bank of England's initial announcement was that, absent meaningful further information, it would apply for a bank insolvency procedure, under which covered depositors are paid out by the Financial Services Compensation Scheme. Over the weekend, the concentration of the bank's deposit base in a single economic sector — much of it above the coverage limit and comprising the operating cash of early-stage companies — changed the assessment: the disruption from an insolvency would have been far wider than the bank's size suggested.
The transfer
On the morning of 13 March 2023, the Bank of England exercised its stabilisation powers under the Banking Act 2009 and transferred Silicon Valley Bank UK to HSBC for a consideration of £1, after the subsidiary's own capital instruments were written down. The bank opened as usual; no depositor lost access to funds and no taxpayer support was required.
Why the case matters
SVB UK is the cleanest recent example of the sale-of-business outcome the resolution toolkit was designed to deliver: a private-sector purchaser, full continuity for depositors, losses borne by the failed bank's owners, and execution inside a weekend. It also showed that the choice between insolvency and resolution can turn on the structure of a deposit base, not just its size — a lesson that echoes through the EU's CMDI debate about mid-sized banks.