The UK government and the Bank of England (BoE) have brokered a rescue deal to sell the UK division of collapsed Silicon Valley Bank (SVB) to HSBC.

After the US Federal Reserve recently raised interest rates in a bid to tackle inflation, a bank run late last week led to SVB’s insolvency.

As withdrawals rocketed, SVB began selling generally safe bonds at a loss and tried without success to raise additional capital through outside investors.

Once the sixteenth largest US bank, SVP’s demise makes it the largest failure of a US bank since Washington Mutual collapsed during the global financial crisis of 2008.

The BoE said in a written statement: “This action has been taken to stabilise SVBUK, ensuring the continuity of banking services, minimising disruption to the UK technology sector and supporting confidence in the financial system.”

The move was welcomed by the tech industry, with many companies fearful of their own collapse following the news of SVP’s demise.

“I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence,” said chancellor Jeremy Hunt.

The government added that no taxpayer money had been used in facilitating SVPUK’s rescue.

Krista Griggs, head of financial services & insurance at tech giant Fujitsu said that HSBC’s quick response will ensure continuity for businesses at risk from the bank’s collapse.

“It shows commitment to innovation, and I expect to see more involvement from traditional banks as they look to provide stability during disruption - as well as further union between them and FinTech companies as this sector continues to rapidly evolve,” added Griggs.

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