© Reuters. FILE PHOTO: Workers are seen in offices of HSBC and Barclays bank in the Canary Wharf financial district at dusk in London, Britain, November 17, 2017. Picture taken November 17, 2017. REUTERS/Toby Melville
By Iain Withers, Elizabeth Howcroft and Martin Coulter
LONDON (Reuters) – British banks are seeing a pick-up in enquiries to switch cash between institutions after the collapse of U.S. tech lender Silicon Valley Bank, as contagion fears prompt some depositors to try to figure out the safest harbours for their funds.
One of the country’s biggest lenders, Barclays (LON:), told Reuters it had seen an increase in enquiries to switch or open business accounts in the past few days. Virgin Money (LON:), Britain’s sixth largest bank, said in a statement it had also seen “net business deposit inflows in recent days”.
SVB’s failure has roiled global markets over the past week, with contagion concerns spreading to Swiss lender Credit Suisse, forcing the country’s central bank to shore up its liquidity on Thursday in a move that brought some respite.
The British government and the Bank of England have said the country’s banking system is safe, sound and well capitalised, while the UK arm of SVB was rescued by Europe’s largest bank HSBC on Monday. That means SVB UK’s customer deposits are safe and their loans supported, HSBC’s top bosses have said.
But the collapse of the Californian bank has drawn additional scrutiny of the safety of uninsured deposits above an 85,000 pound guarantee granted to licenced banks in Britain, particularly for businesses, as they are more likely to have larger deposits.
Sam Franklin, CEO of recruitment platform Otta, which has around 70 full-time employees, said the crisis had impacted the way smaller startups thought about their finances.
Franklin told Reuters a number of CEOs and startup execs had started researching other banks with which to park cash in addition to SVB UK this week, citing Barclays as a favourite among some.
“We’re all going on this learning journey together. We’re all looking for banks with great backing, strong brands, and solid track records,” he said.
The founder of banking platform Griffin, David Jarvis, said he is in a WhatsApp group of over 200 fintech founders, of which dozens have started the process for opening new bank accounts following the collapse of SVB. He said the people were “mostly looking at the big clearing banks”.
Russ Shaw, founder of startup industry body…
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