Bankers at the British branch of the failed Silicon Valley Bank reportedly received bonuses totalling tens of millions of pounds just days after the Bank of England stepped in to help orchestrate a rescue package deal that saw its assets bought up by HSCB for £1.
According to a report from Sky News, “modest” employee bonuses totalling between £15 million and £20 million were given out to staff and executives, though it is currently unclear exactly how much CEO Erin Platts and other executives may have received.
The broadcaster, citing an inside source, claimed that the banker bonuses demonstrated the confidence that HSBC has in the British arm of the failed Silicon Valley Bank, as Europe’s largest bank would have had to sign off on the payouts after it took over SVB UK on Monday.
It follows reports that bonuses were also handed out to the U.S. staff of the failed bank just hours before it became the largest bank to collapse since the 2008 global financial crisis.
SVB UK, which employed around 700 people and was a profitable business, faced the possibility of collapsing after its American parent company went under.
To prevent damage to the British tech sector, Prime Minister Rishi Sunak held an emergency auction for the bank, which ultimately saw it purchased by HSBC for £1 after it secured assurances that it would be exempt from the ‘ring-fencing’ rules that were put into place after the 2008 crisis, mandating that the nation’s largest lenders keep functions such as banking services separate from other activities such as investments and international banking.
The ring-fencing waiver was granted after the government was warned by SVB UK that if it collapsed it would “cripple the [tech]] sector and set the ecosystem back 20 years” and that “many businesses will be sent into involuntary liquidation overnight.”
They went on to say that if they were not given a bailout or sold off to another bank it would represent “an existential threat to the UK tech sector”, adding: “The Bank of England’s assessment that SVB going into administration would have limited impact on the UK economy displays a dangerous lack of understanding of the sector and the role it plays in the wider economy, both today and in the future.”
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Commenting on the move to sell off SVB UK to HSBC, Chancellor Jeremy Hunt, the government’s controversial finance minister, said: “The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs.”
“We have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence… [This] ensures customer deposits are protected and can bank as normal, with no taxpayer support.”
While Republican lawmakers and conservatives in the U.S. have pointed to the disastrous economic policies of the Biden administration and the resulting ‘Bidenflation’ economic crisis for sparking the SVB’s failure, others have also pointed to the California-based bank’s proclivity to indulge in leftist Environmental, Social, and Governance (ESG) policies in its operations, meaning that instead of prioritising economic viability woke executives at the bank sought to emphasise priorities such as diversity, inclusion, and equity (DIE).
This was further demonstrated by the fact that the Silicon Valley Bank (SVB) has been reported to have donated over $70 million to leftist causes such as the Marxist Black Lives Matter campaign, which has been accused of using donations to prop up the lavish lifestyle of its founders.
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