Hundreds of British tech startups were saved from disaster today as HSBC bought the UK arm of collapsed US lender Silicon Valley Bank.

After an intensive talks that dragged into the early hours, Chancellor Jeremy Hunt announced the move this morning before markets opened.

He insisted all deposits had been protected, and customers will be able to access their deposits and banking services as normal from today.

But Mr Hunt stressed that no taxpayer funding had been deployed, with the transaction 'facilitated' by the Bank of England in consultation with the Treasury, using powers introduced after the 2008 Credit Crunch.

The FTSE 100 opened marginally down shortly after the news was announced.

The crisis erupted when California-based parent company Silicon Valley Bank imploded and had its assets seized by US regulators on Friday - the largest failure of a bank since the financial crisis.
The US government acted to head off banking sector contagion after the failure, protecting all deposits.

The Bank of England then ordered the UK subsidiary of SVB into insolvency from last night.

But that left more than 200 small British tech firms facing potentially catastrophic cashflow problems, with an estimated £2.5billion of capital in SVB.

HSBC is thought to have bought the UK arm for a nominal sum, taking on its liabilities.

Mr Hunt said: 'The UK's tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs.

'I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK's customers with confidence.

'Today the government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order.
'HSBC is Europe's largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them.'

All deposits are 'safe and secure' following the sale of Silicon Valley Bank UK to HSBC, the Bank of England said.

In a statement, the BofE said: 'The Bank of England (Bank), in consultation with the Prudential Regulation Authority (PRA), HM Treasury (HMT) and the Financial Conduct Authority (FCA), has taken the decision to sell Silicon Valley Bank UK Limited ('SVBUK'), the UK subsidiary of the US bank, to HSBC UK Bank Plc (HSBC).

'HSBC is authorised and supervised by the PRA and the FCA.

'This action has been taken to stabilise SVBUK, ensuring the continuity of banking services, minimising disruption to the UK technology sector and supporting confidence in the financial system.