Statement by Minister McGrath on collapse of Silicon Valley Bank (SVB)

Following the announcement of the failure of Silicon Valley Bank, a US technology focused lender, the Irish Financial Stability Group (FSG) met on Monday, 13 March, to assess the situation and any impacts on the Irish financial system. The FSG consists of senior officials from the Department of Finance, NTMA and the Central Bank of Ireland, and is chaired by the Secretary General of the Department of Finance.

Silicon Valley Bank (SVB) was a technology focused lender with US$209 billion in assets, making it the 16th largest bank in the US and was listed on the NASDAQ and had a significant number of Irish businesses among its clients.

The company focused on lending to technology companies, providing services to venture capital, revenue-based financing and private equity firms that invest in technology and biotechnology. In addition to taking deposits and making loans, the bank operated venture capital and private equity divisions that sometimes invested in the firm's commercial banking clients.

The US Federal Reserve announced on Sunday that an emergency lending facility called the Bank Term Funding programme is being launched to support the US banking system post the SVB failure. SVB also had a UK subsidiary, SVBUK. The UK Government announced the sale of SVBUK ON Monday morning to HSBC for £1. In the case of the US and the UK, depositors in the bank are to be protected.

The Irish FSG has established a sub-group to co-ordinate enhanced monitoring and reporting on the domestic impacts arising from the failure of SVB. The sub-group includes officials from the Department of Finance, NTMA and the Central Bank of Ireland, as well as officials from relevant departments and agencies.

Minister McGrath stated:

“It is important to highlight the limited direct impact on the Irish financial system of the failure of Silicon Valley Bank. The retail banks operating in Ireland have no exposure to this Bank. The swift actions taken by regulatory authorities in the US and the UK are important in ensuring that SVB clients can access their deposits and credit facilities.”

He added:

“A meeting of the Financial Stability Group (FSG) took place yesterday, Monday 13 March, to discuss the collapse of SVB. The FSG has established a sub-group to co-ordinate enhanced monitoring and reporting on the domestic impacts arising from the failure of SVB.

"The sub-group includes officials from the Department of Finance, NTMA and the Central Bank of Ireland as well as officials from departments and agencies who have a direct relationship with the tech sector in Ireland. The sub group will meet and engage on a regular basis and report to me on developments as they arise.”