Report: Shanghai Bank Mulls Buying Silicon Valley Bank"s Stake in Chinese Subsidiary
According to reports, Shanghai Pudong Development Bank may acquire the China-based subsidiary of Silicon Valley Bank (SVB). Authorities in the Chinese city of Shanghai reportedly back the acquisition, which may help minimize the impact of SVB’s shutdown. In its statement following SVB’s demise, SPD Silicon Valley Bank reportedly said its operations remained stable. Shanghai Authorities Seek to Limit Impact of SVB’s Demise
Silicon Valley Bank’s joint venture partner Shanghai Pudong Development Bank (SPDB) plans to take over the collapsed financial institution’s China-based subsidiary, a report has said. According to the report, the SPDB is likely to acquire 50% of the collapsed U.S. bank’s stake in the subsidiary.
The plan to keep the financial institution’s subsidiary running came just days after the Bank of England helped to facilitate HSBC’s acquisition of the collapsed bank’s subsidiary in the United Kingdom. British authorities have lauded the acquisition of the subsidiary for £1 ($1.22) which protects depositors ostensibly without using taxpayers’ money.
According to a report in the South China Morning Post, Shanghai banking authorities may back the acquisition, which may help the city weather the storm sparked by SVB’s abrupt shutdown. The report added that the local government and the city banking regulators had discussed the possibility of SPDB’s takeover of the subsidiary which operates as SPD Silicon Valley Bank in China.
While Shanghai banking authorities are also open to the idea of a non-Chinese entity buying the subsidiary, analysts quoted in the report said this option may not be the most ideal for customers who want a quick resolution to the issue.
Meanwhile, in its statement following SVB’s spectacular collapse, SPD Silicon Valley Bank reportedly said its operations remained stable. The subsidiary highlighted China’s banking regulations which required it to maintain an independent balance sheet separate from its parent company. Tags in this story HSBC, Shanghai Pudong Development Bank (SPDB), Silicon Valley Bank
What are your thoughts on this story? Let us know what you think in the comments section. Terence Zimwara
Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route. Central Bank Digital Currency Transactions to Reach $213 Billion Annually by 2030, Research Shows FEATURED | 18 hours ago SD Governor Urges 20 States to Block Legislation That Bans Crypto"s Use as Money — Says "Its a Threat to Our Freedom" FEATURED | 2 days ago
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