LONDON — The fallout from the bankruptcy of the U.S. bank Silicon Valley continues, and concerns have reached the British banking sector, as the central bank rushed to finalize the acquisition as quickly as possible to reassure financial markets.

To understand how the UK economy will be affected by this financial crisis, we asked economist Zakaria Carty, investment officer at the European Bank for Reconstruction and Development (EBERD), and Omar Qafisha, a UK-based financial accountant.

  • How did the crisis move to Britain?

Omar Qafisha says the crisis spilled over into Britain immediately when most of the bank's startup clients decided to withdraw their deposits, prompting the British branch to request £1.8bn in urgent liquidity from the central bank.

It was at that moment that the Bank realized that the crisis had reached London and immediately declared bankruptcy of the Silicon Valley Bank branch in Britain, whose deposits fell from £10 billion to £7 billion in one day.


  • What impact does this have on UK financial markets?

By the end of the week, the central bank completed the acquisition of the British branch of Silicon Valley Bank by HSBC, although Britain's financial markets lost $50 billion in several days.

He added that the crisis may have an impact on the Bank of England's decision to raise interest rates to fight inflation, and may surprise everyone by cutting interest rates at its next meeting.

  • Is the deal really worth GBP?

Financial expert Omar Qafisha says that the amount of £ is a symbolic number that is placed in the contract only in order to complete the legal procedures as soon as possible.

Silicon Valley Bank has £5.5bn in assets and has £6.7bn in customer liabilities, meaning it has a deficit of £1.2bn.

Therefore, the Bank of England wanted the acquisition of a large and well-established financial institution with the ability to solve the crisis.


  • Why would HSBC buy a bankrupt institution?

HSBC has succeeded in convincing the central bank of its ability to buy and rescue Britain's Silicon Valley Bank, where it has $3 trillion in assets, confirming its ability to absorb such a deal.

Once the deal was completed, 3,<> customers who had been working with Silicon Valley – an elite customer that any technology bank could have – moved to the bank.

  • Will the crisis continue?

Economist Zakaria Carty does not believe that the financial crisis will last for long, suggesting that everything that is happening these days is due to the panic that will gradually subside.

He pointed out that the current US Treasury Secretary was a member of the US Federal Bank in California and knows well the Bank of "Silicon Valley", which explains the speed of the US administration's move, which announced the guarantee of all deposits and not only the amount of $ 250,2008 insured, which reassured the financial markets, and for this Zakaria Carty rules out a financial crisis similar to <>.