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HSBC to buy SVB UK for £1
- A4ET8a8uTh0 4y agoI would give up a fair amount to listen in on those conversations and negotiations.
- 3np 4y agoDupe BBC: https://news.ycombinator.com/item?id=35132181 https://news.ycombinator.com/item?id=35132181
- AdamN 4y agoDid this require negotiation with SVB HQ leadership or the FDIC or are these national subsidiaries wholly independent and can do this on their own (i.e. is there a CEO of SVB UK and a board that has these rights?)
- gnfargbl 4y agoI think the relevant issue is that the national regulators are independent. SVBUK was (is!) regulated by the UK FCA, so on insolvency the FCA is the regulator in charge of resolving issues.
- lucozade 4y agoThere doesn't have to be a CEO but there will be a UK legal entity, subject to UK regulation (presumably the PRA) and with its own board.
- AdamN 4y agoOk I think I get it now. The UK regulator seized the bank and the accounts and sold both to HSBC. The US regulator just seized the accounts, which have now been backstopped fully, and the SVB bank itself is just operating for a while longer as they find a buyer for the carcass?
- justincormack 4y agoNo SVB has been shut down too. SVB UK is an independent company as of fairly recently. Banks have different regulatory environments than normal companies and no control if things go wrong.
- AdamN 4y agoSVB still has employees that are apparently going to continue to get paid for a number of weeks (years for the ktlo people probably). The creation of a separate entity for all the assets makes me think that they've separated the two and that SVB itself isn't shut down just yet (although clearly it's a carcass as I said before with a value near zero).
- samwillis 4y ago> BoE used special resolution powers to “Transfer to a Private Sector Purchaser”ie “without need for consent of the failed bank, or its shareholders, customers or counterparties”… > ALSO…Forcing UK arm to subsidiarise with separate assets in August (when it reached £100m insured deposits) essentially frozen in UK by authorities and then able to be handed to HSBC (ie avoiding parent company/ Fed swiping them back to US) seems impressive UK regulatory success https://twitter.com/faisalislam/status/1635184963414024195 https://twitter.com/faisalislam/status/1635184963414024195
- pja 4y agoThe UK mandates that a bank serving UK depositors must do so through a ring-fenced entity. Explanatory link here: https://uk.practicallaw.thomsonreuters.com/w-008-0211?transitionType=Default&contextData=(sc.Default)#co_anchor_a777799 https://uk.practicallaw.thomsonreuters.com/w-008-0211?transi... Relevant quote: “UK banks with GBP25 billion or more in "core deposits" are required to ring-fence their retail and small and medium sized enterprise deposit-taking business into a legally, operationally and economically separate ring-fenced body (RFB). An RFB is prohibited from certain activities such as dealing in complex derivatives, principal and commodity trading activities and operating branches and subsidiaries outside the UK and the EEA.” SVB-UK is RFB setup by SVB in the US as a (presumably wholly-owned) subsidiary of the parent company. The Companies House entry for them is here: https://find-and-update.company-information.service.gov.uk/company/12546585 https://find-and-update.company-information.service.gov.uk/c...
- pja 4y agoNB. I don’t think SVB-UK had £25billion in deposits? Reporting says high single digit £billions. It looks like the BoE forced them to create a UK subsidiary anyway if they wanted to keep their UK banking licence.
- plibither8 4y agoCan someone explain who pockets this £1, or how this is formally transferred? Is it at all transferred or is the price just for bookkeeping?
- ackbar03 4y agoDoesn't really matter. Whoever gets it will probably drop it and lose it at some point when he buys a soda or empties his pockets for the washing machine
- lostlogin 4y agoGoodness, they should be careful or someone else might buy a 200 billion dollar disaster with that same coin.
- baq 4y agoit gets converted into a snickers bar and ceos publicly split it in half and eat it.
- plibither8 4y agoHah, if it's split then they essentially bought it for 50 cents.
- ackbar03 4y agoI dont think you can even get a snickers for an euro. The fed took care of that.
- timthorn 4y agoI believe it will be acting as the "consideration" that UK contract law requires for a contact to be deemed valid.
- bagels 4y agoThe Bank of England apparently took over that subsidiary, so if the money is actually paid, it will be paid to them.
- OJFord 4y ago(alt source) dupe: https://news.ycombinator.com/item?id=35132181 https://news.ycombinator.com/item?id=35132181
- geoff_hinton 4y ago“No we want £2” “£1 take it or leave it”
- fugazi_0x000000 4y agoA classic "fiver" would've been way better. Can't get much for a pound these days anyway.
- deleted 4y ago[deleted]
- ggm 4y agoSafer hands than HBOS