Silicon Valley Bank (SVB) was put under US government control on Friday afternoon after the biggest failure of a US bank since 2008. Silicon Valley Bank UK (SVB UK), the first location SVB opened outside the US, was ordered into insolvency by The Bank Of England on Friday evening.

More than 200 UK tech companies signed a letter addressed to the Chancellor of the Exchequer calling for government intervention due to fears of overnight receivership of UK tech companies critical to the UK economy. Concerns that almost all of the £6.7bn deposits within the bank would be lost, with only £85,000 of clients’ deposits protected by the Financial Services Compensation Scheme, or £170,000 for joint accounts.

The Treasury has been working on a plan to prevent firms from running out of cash in the short term, with longer-term concerns of a substantial impact on the liquidity of the tech ecosystem. Therefore, the announcement this morning that HSBC would buy SVB UK has been met with great relief by their 3,500 clients.

The takeover, a result of overnight talks between Downing Street, the Bank of England, and HSBC, will override the Bank of England’s decision to place the bank into insolvency. HSBC bought SVB UK for £1, which made pre-tax profits of £88m last year. The Bank of England believes the takeover will stabilise SVB UK and minimise disruption to the UK technology sector, supporting confidence in the financial system.