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Sources: Shanghai Bank Contemplating Purchase Of Silicon Valley Bank’s Chinese Unit

Author

Jay Solano

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Reading time

2 mins
Last update

Author

Jay Solano

Tags

Category

Crypto News

Reading time

2 mins
Last update

Author

Jay Solano

Tags

Reading time

2 mins
Last update

silicon valley bank's chinese unit

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Reports indicate that Shanghai Pudong Development Bank purchased Silicon Valley Bank’s China-based subsidiary (SVB). According to reports, authorities in the Chinese Shanghai municipality support the acquisition, which may mitigate the effects of SVB’s shutdown. The SPD Silicon Valley Bank apparently stated in its announcement following SVB’s dissolution that its operations were stable.

Shanghai Authorities Step In To Mitigate The Fallout From SVB’s Demise

According to a report, Shanghai Pudong Development Bank (SPDB), a joint venture partner of Silicon Valley Bank, intends to assume control of the failed bank’s China-based subsidiary. The article indicates that the SPDB is expected to purchase a 50% interest in the subsidiary from the failed U.S. bank.

The strategy to keep the financial institution’s subsidiary operational was announced just days after the Bank of England facilitated HSBC’s acquisition of the failed bank’s United Kingdom subsidiary. British officials have praised the acquisition of the subsidiary for £1 ($1.22), which presumably safeguards depositors without using state funds.

The South China Morning Post reported that Shanghai banking officials might support the takeover, which might aid the city in surviving the storm caused by SVB’s abrupt shutdown. According to the article, the local administration and the city’s banking regulators have considered the prospect of SPDB acquiring the subsidiary that operates as SPD Silicon Valley Bank in China.

Although analysts suggested this option may not be the best for clients who want a rapid resolution to the issue, Shanghai banking regulators are also open to the concept of a non-Chinese firm purchasing the subsidiary.

SPD Silicon Valley Bank apparently stated in its statement following SVB’s catastrophic failure that its operations remained stable. The subsidiary emphasized that China’s banking regulations obliged it to maintain a separate balance sheet from its parent company.