Over 200 U.K. firms in technology and life sciences have been left unable to pay staff due to the collapse of Silicon Valley Bank SIVB, which was shut down by regulators on Friday and whose demise is now the largest failure of a U.S. bank since 2008.
While the bank's shutdown poses no immediate danger to the U.K.'s financial system as a whole, it does present a serious risk to some of the country's most promising companies, according to Chancellor Jeremy Hunt, the BBC reported.
The British government is working on a plan to ensure firms can meet their cashflow needs "within the next few days" and pay their staff, Hunt said. Still, more than 200 heads of U.K. tech companies signed a letter to Hunt, calling for more government intervention to prevent them from going into receivership.
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"The cost of inaction here means that these firms could fail in the short-term and your technology growth ambitions will fail in the long-term," they wrote.
Between 30% and 40% of U.K. startups that employ up to 50,000 people could be affected by SVB's collapse.
Michael Moore, director general of the British Private Equity and Venture Capital Association, told the BBC that "help is needed by tomorrow [Monday]" for tech firms and entrepreneurs.
As of Sunday, Silicon Valley Bank UK has stopped making payments or accepting deposits, prior to going into insolvency. The move will allow individual depositors to be paid up to £85,000 from the U.K.'s deposit insurance scheme. Any more protection would become a "serious moral hazard," according to Treasury Permanent Secretary Nick Macpherson.
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