The bank collapse is expected to affect about 10,000 small firms with accounts at Silicon Valley Bank. And one lakh jobs are likely to be lost. This will lead to increase in unemployment. The issue may also affect some Indian startups.
Also Read: SVB ignored for profit? Hindenburg did not see that the foundation of the US bank was shaken
Not only the job losses resulting from the bank crisis are likely to result in reduced employee salaries as well. It is indicated that this bank crisis will not be resolved soon. The Federal Deposit Insurance Corporation, the regulator that took over the failed bank on Friday, has offered Silicon Valley bank employees 45 days of work at 1.5 times their pay. At the end of last year, SVB employed 8,528 people.
The Bank of England may confirm that all depositors of the UK’s Silicon Valley bank are safe with HSBC’s takeover of SVB’s UK branch. The takeover will come as a relief to investors who thought the collapse of SVB Bank would be a crisis in the UK as well. The acquisition comes as a huge relief to tech companies in the UK who fear losing funding could threaten their very survival.
As at 10 March 2023, SVB’s UK arm had approximately £550 billion in loans and approximately £670 billion in deposits. The bank’s UK arm posted a pre-tax profit of £8.8 crore in the financial year ended December 31, 2022.
