Bank of England seeks to wind up Silicon Valley Bank’s UK arm

The Bank of England said on Friday that it was seeking a court order to place Silicon Valley Bank UK Limited into an insolvency procedure, after U.S. regulators took over its parent company, SVB Financial Group, earlier in the day.

“SVB UK has a limited presence in the UK and no critical functions supporting the financial system. In the interim, the firm will stop making payments or accepting deposits,” the BoE said.

Under insolvency proceedings for banks in Britain, some depositors are eligible for up to 85,000 pounds ($102,000) of compensation for lost deposits, or 170,000 pounds for joint accounts.

Other assets and liabilities would be managed by the bank’s liquidators and any funds recovered would be passed on to creditors, the BoE said.

Bank failures are rare in Britain, with only two lenders going through the BoE’s resolution procedures since 2009.

Earlier on Friday, the Financial Times reported that SVB’s British arm had sought 1.8 billion pounds of liquidity from the BoE via its discount window facility, which offers emergency funding to banks if they have adequate collateral.

Silicon Valley Bank UK said earlier on Friday that it was a standalone entity with an independent board of directors, ring-fenced from the parent company and other subsidiaries.

U.S banking regulators took over the parent SVB earlier on Friday in a bid to protect depositors after the largest bank failure since the financial crisis prompted the global banking sector to shed billions in market value.

The rout in SVB’s stock, which began on Thursday, has spilled over into other U.S. and European banks. U.S. banks have lost over $100 billion in stock market value and European banks shed another $50 billion in value over the past two days, according to a Reuters calculation.