Hideo Nakamura Reports suggest that Shanghai Pudong Development Bank might buy the Chinese branch of Silicon Valley Bank (SVB). Apparently, the people in charge of Shanghai are in favor of this purchase, which could help lessen the damage from SVB’s closure. SVB’s official statement after its close said that their operations were still running smoothly.
Shanghai Pudong Development Bank to Buy Half of Silicon Valley Bank’s China Subdivision
China’s Shanghai Pudong Development Bank (SPDB) is going to purchase half of Silicon Valley Bank’s China-based subdivision that has gone out of business. This means the SPDB will own 50% of the American bank’s stake in this part of its business.
The Bank of England recently made a plan to keep the subsidiary of a financial institution running. This was done by helping HSBC buy the UK’s failed bank’s part for just £1 ($1.22). People in charge are very happy about this as it helps protect people who deposited their money without having to use taxes from citizens.
A report in the South China Morning Post said that Shanghai’s banking officials might agree to a purchase. This could help the city during tough times caused by SVB’s sudden closing. The local government and city banking officials have had conversations about SPD Bank taking over the company in China named SPD Silicon Valley Bank.
Shanghai banking authorities are okay with a non-Chinese company buying the subsidiary, but people in the report say this may not be the best idea for customers who need a fast solution to their problem.
After Silicon Valley Bank (SVB) had a big fail, SPD Silicon Valley Bank said their own operations are still alright. The division from the parent company pointed out that Chinese banking regulations need them to keep an individual balance sheet that is independent from the parent organization.
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