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.
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Source: Bitcoin.com
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