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(Alliance News) - The events surrounding Silicon Valley Bank served a stark reminder of the need of a "more diverse financing system", UK Chancellor Jeremy Hunt said as he unveiled his budget.
Hunt said he worked "night and day" with Prime Minister Rishi Sunak and the Bank of England to "protect the deposits of thousands of our most cutting-edge companies". It led to the sale of SVB's UK arm to HSBC Holdings PLC.
The Asia-focused lender on Monday said its ring-fenced UK subsidiary, HSBC UK Bank PLC has acquired Silicon Valley Bank UK Ltd, for the nominal price of GBP1.
On Friday last week, SVB UK's Californian parent company collapsed, with US regulators seizing its assets. The Bank of England then ordered its UK arm into insolvency on Sunday night, threatening the deposits of many UK technology companies.
"The future of those companies is now safe in the hands of Europe's biggest and most credit-worthy banks," Hunt said on Wednesday.
"But those events show that we need to build a larger, more diverse financing system, where the benefits of investment in high growth firms are available to more investors."
In the autumn statement, Hunt will announce a plan to "deliver that".
"It will include measures to unlock productive investment in defined contribution pension funds and other sources, make the London Stock Exchange a more attractive place to list and complete our response to the challenges created by the US inflation reduction act," the chancellor added.
Confidence in London markets has been dealt a serious of blows recently.
Arm Ltd earlier in March chose to float only in New York later this year. The Cambridge, England-based firm said it will consider a "subsequent UK listing in due course". Arm was a London listing and FTSE 100 constituent prior to being acquired by Tokyo-based Softbank Group Corp for GBP24.3 billion in 2016.
Dublin-based building materials firm CRH earlier in March said it plans to move its primary stock listing to the US from London. Plumbing and heating products supplier Ferguson PLC made a similar move, while miner BHP Group Ltd moved its own primary listing to Sydney.
"However, when it comes to our innovation industries, there are two areas I want to make progress on today. Nigel Lawson made the City of London one of the world's top financial centres by competitive deregulation. With our Brexit autonomy, we can do the same for our high growth sectors. So today I want to reform the regulation around medicines and medical technology," Hunt said on Wednesday.
By Eric Cunha, Alliance News news editor
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