Harriett Baldwin thanks all who worked hard over the weekend to limit risks to our tech and life sciences sector, and welcomes the HSBC rescue of the UK arm of the Silicon Valley Bank as the best possible outcome in these difficult circumstances.
Harriett Baldwin (West Worcestershire) (Con)
May I put on the record my gratitude to the Minister, his colleagues and officials, and to people at the Bank and in the City in general, who have obviously worked flat out all weekend to deliver what turns out to be the best possible outcome in these difficult circumstances?
On the importance of the sector to the UK economy, did the Minister and the Bank treat this situation any differently because of the sector in which SVB was operating, or would they have tried for the same sort of solution for a bank in any sector? Was the Minister as concerned as I was about reports that investors required the firms that they were funding to put money into the bank as a condition for investment? Finally, given that other banks have collapsed in the US—other small banks, including one that specialised in crypto—does he think that crypto is in any way contributing to financial instability?
The Economic Secretary to the Treasury (Andrew Griffith)
I thank my hon. Friend, one of my predecessors and the Chair of the Select Committee, for her support and comments. The degree of concentration in a particular sector is unusual—it was an unusual feature. The business model of Silicon Valley Bank in the UK was different from that in the US, partly because of the tight regulations that we have here. For that reason, I have not seen any evidence that the banking of crypto-asset companies was something that contributed. Rather, once the Fed had taken its action, we saw the impact on the bank here. That is why it was right for the Bank to act to give us the space to protect that bank and to achieve the outcome that we announced this morning.