Nigel Green, the CEO and founder of deVere Group, has welcomed the decision of US Treasury Secretary Janet Yellen not to bail out Silicon Valley Bank (SVB).
The bank’s collapse has raised fears of a banking crisis, but Yellen has assured Americans that the US banking system is safe and well-capitalised.
While Green acknowledges the regrettable losses for shareholders and the market jitters, he agrees that Yellen has made the right decision to bring stability and confidence into the critical banking sector.
He emphasised that the fallout of not doing so could have serious, far-reaching consequences for the US and the global economy.
The UK Government is currently working on a cash lifeline for tech firms hit by the SVB collapse.
Chancellor Jeremy Hunt has called the issue a “high priority” and has been in late-night meetings with the Prime Minister and the Bank of England Governor in an attempt to avoid further fallout.
Hunt assured the public that there is no systemic risk to the financial system, but warned that there is a serious risk to the technology and life sciences sectors.
The collapse of SVB’s American parent company on Friday marked the largest failure of a bank since the 2008 financial crisis.
The focus now is on trying to meet the needs of depositors and finding a longer-term solution that minimises or even avoids losses to promising companies in the technology and life sciences sectors.
