The resolution of Silicon Valley Bank UK (SVB UK) in March 2023 provides an especially relevant modern comparison with BCCI because the decision was taken by the Bank of England itself.
SVB UK was the British subsidiary of Silicon Valley Bank in the United States. When its US parent collapsed on 10 March 2023, confidence in the UK subsidiary deteriorated rapidly.
Silicon Valley Bank had grown rapidly during the technology boom, with deposits rising sharply as venture-capital-backed companies raised large amounts of cash. Much of this money was invested in long-term government bonds and mortgage-backed securities, which appeared safe while interest rates remained low.
When interest rates rose sharply, the market value of those securities fell. At the same time, technology companies began withdrawing deposits to fund their operations. SVB was forced to sell assets at a loss, creating a US$1.8 billion shortfall, and announced plans to raise about US$2.2 billion in new capital.
Instead of restoring confidence, the announcement alarmed customers and investors. Depositors rushed to withdraw funds, producing an exceptionally rapid bank run. The resulting liquidity crisis left SVB unable to meet withdrawals, leading US regulators to close the bank in March 2023.
The Bank of England and Prudential Regulation Authority concluded that SVB UK’s liquidity position had worsened so severely that it could no longer recover independently. At the point of failure, SVB UK had a balance sheet of approximately £8.8 billion and deposits of about £6.7 billion.
The Bank initially announced that it intended to place SVB UK into a Bank Insolvency Procedure.
That was not, however, the end of the matter.
From Proposed Insolvency to Private-Sector Rescue
Over the weekend of 11–12 March 2023, the Bank of England and Government explored alternatives.
When a credible private-sector purchaser emerged, the Bank changed course.
On 13 March 2023, the entire shareholding of SVB UK was transferred to HSBC UK Bank plc using the Bank of England’s statutory resolution powers.
The Government confirmed that customers could continue accessing their deposits and normal banking services immediately after the transaction.
The importance of this sequence is considerable:
- Friday: insolvency was contemplated.
- Weekend: alternatives were explored.
- Monday: the bank was transferred to a private-sector purchaser and continued operating.
The authorities therefore demonstrated that an initial decision to close or place a bank into insolvency could be reconsidered when a credible alternative capable of preserving viable banking operations became available.
Resolution Rather Than Destruction
The Bank of England describes resolution as a framework designed to allow banks to fail safely while protecting financial stability, maintaining critical banking services and limiting taxpayer exposure.
SVB UK illustrates that principle in practice.
Although the Bank and PRA concluded that the institution had failed and could not independently recover, the business itself was preserved.
The resolution allowed:
- deposits to remain available;
- customers to continue banking normally;
- employees and operational infrastructure to remain within a functioning bank;
- ownership to transfer;
- shareholder and capital interests to absorb losses where appropriate; and
- disruption to the wider economy to be minimised.
The objective was not to pretend that the bank had not failed.
The objective was to ensure that failure of the legal entity did not unnecessarily destroy the viable banking business.
No Taxpayer Bailout
The SVB UK comparison is particularly relevant to BCCI because the eventual solution was essentially a private-sector transfer.
HM Treasury and the Bank of England facilitated the sale to HSBC rather than recapitalising the bank with taxpayer money. The Bank of England subsequently described SVB UK as having been resolved through a transfer to a private purchaser after HSBC emerged as a credible solution.
That bears directly on one of the central arguments made regarding BCCI.
BCCI’s supporters were not necessarily asking the British taxpayer to provide capital comparable to the rescue of a systemically important institution.
The Abu Dhabi majority shareholders were themselves offering substantial private financial support and had developed a restructuring programme designed to preserve stronger operations.
The question therefore becomes sharper:
if the Bank of England was prepared in 2023 to change course from insolvency to preservation when a credible private-sector solution emerged, why was comparable flexibility not exercised in 1991 when BCCI already had financially powerful majority shareholders supporting a restructuring programme?
Preservation of Customers and Confidence
The treatment of depositors is another important point of comparison.
When SVB UK failed, preserving uninterrupted access to banking services was a central consideration. The Government announced immediately after the HSBC transaction that customers would be able to access deposits and banking services as normal.
This recognised a fundamental feature of banking:
confidence can be destroyed by interruption itself.
A bank may have valuable customer relationships and viable operations even though the institution’s capital or liquidity position has failed.
The regulatory solution should therefore seek, where possible, to prevent institutional failure from becoming unnecessary destruction of customer relationships and economic value.
BCCI experienced the opposite.
Branches were abruptly closed across jurisdictions.
Depositors lost immediate access to funds.
Employees lost their positions.
Customer relationships built over many years were disrupted before the proposed successor institutions could be tested.
In Britain, many of the affected BCCI retail customers belonged to immigrant Asian communities. Across other jurisdictions, its depositor base was concentrated substantially in Asia, Africa and the Middle East.
The relevant double-standards question is therefore whether the economic and human consequences of destroying those relationships were given comparable weight.
The Value of a Credible Alternative
The SVB UK resolution is particularly useful because it demonstrates that regulators can distinguish between:
an institution that cannot continue in its existing form and a viable banking franchise that can continue under different ownership.
The Bank of England initially judged SVB UK to be unable to recover independently.
But that did not mean every operation had become worthless.
When HSBC emerged as a credible purchaser, the Bank used its resolution powers to transfer the institution rather than proceed with insolvency.
This distinction closely resembles the principle behind BCCI’s proposed restructuring.
The question in BCCI was not necessarily whether the existing group should continue unchanged.
Its restructuring already contemplated substantial transformation:
- new ownership arrangements;
- new management;
- stronger capital;
- separation of impaired assets;
- independently regulated successor banks; and
- transfer of viable operations.
The objective was therefore not simply to preserve “old BCCI”.
It was to replace the existing structure with stronger successor institutions.
Regulators Can Change Course
Perhaps the most important aspect of SVB UK is the willingness of the Bank of England to reconsider its initial approach.
On 10 March, it announced an intention to place the bank into insolvency.
By 13 March, a different solution had been adopted because new information and a credible purchaser had emerged.
That demonstrates an important regulatory principle:
a decision to close need not become irreversible where an alternative capable of protecting depositors and preserving value becomes available.
This is especially relevant when reconsidering BCCI.
In 1991, Abu Dhabi was not an unknown potential purchaser emerging at the last moment.
It was already the majority shareholder.
It had already committed substantial funds.
It had already been working on restructuring.
And the proposed reorganisation had been discussed with regulators.
The comparison therefore raises a difficult question:
if a newly identified private-sector purchaser could justify reversing the expected insolvency of SVB UK over a single weekend, why was the continuing financial commitment of BCCI’s existing majority shareholders not sufficient to justify giving the restructuring greater opportunity to proceed?
Systemic Importance and the Technology Sector
There is an important difference.
SVB UK served a concentrated technology and life-sciences customer base, and its sudden failure threatened disruption to companies dependent upon access to operating cash.
The Government and Bank of England had reason to be concerned about wider economic consequences.
BCCI had a different customer base and business model.
But this difference raises rather than eliminates a further question.
In SVB UK, the authorities considered the needs of its specialised customer community sufficiently important to justify intensive weekend action to preserve continuity.
BCCI also served distinctive communities.
In Britain, its retail depositors included many Asian immigrant families and businesses; internationally, it had extensive relationships across developing economies.
The question is whether the interests of those communities received the same weight in 1991 that regulators later gave to the customers and sectors dependent upon SVB UK.
This is a question of regulatory priority and proportionality, not an assertion of discriminatory intent.
Modern Resolution and BCCI’s Proposed Restructuring
The Bank of England’s modern resolution framework is designed around a principle that would have been highly relevant to BCCI:
banks should be capable of failing without unnecessarily destroying their viable functions.
The legal framework available in 1991 was different, and it would be anachronistic simply to apply today’s Banking Act powers retrospectively.
Nevertheless, the underlying economic principle is not new.
Viable operations can be separated from problem assets.
Ownership can change.
Management can be replaced.
Capital can absorb losses.
Customers can be protected.
And banking services can continue through a successor institution.
The proposed BCCI restructuring contemplated many of these same outcomes.
That makes the historical comparison legitimate even though the legal mechanisms differed.
The Double-Standards Question
The strongest comparison is not:
“SVB UK was saved, therefore BCCI should have been saved.”
The circumstances and regulatory frameworks were different.
The stronger issue is the willingness to pursue alternatives to liquidation when a credible private-sector solution exists.
The central question is:
If the Bank of England could reconsider its initial intention to place SVB UK into insolvency once a credible private purchaser emerged, why was comparable flexibility not exercised in BCCI’s case when its Abu Dhabi majority shareholders were already providing substantial private financial support for a restructuring intended to preserve viable operations?
A second question follows:
If continuity of banking services and preservation of depositor confidence were central considerations in the SVB UK resolution, were the economic and human consequences of abruptly destroying confidence in BCCI given comparable weight in 1991?
And a third:
If the modern regulatory principle is that a bank may fail without destroying its viable banking functions, does the BCCI restructuring proposal deserve reassessment as an early attempt to achieve substantially the same objective?
Perspective
SVB UK provides an especially useful modern comparison because it demonstrates the Bank of England itself applying a flexible and preservation-oriented approach.
The bank had failed.
Its liquidity position was not independently recoverable.
Insolvency was initially contemplated.
But when a credible private-sector solution became available, the authorities changed course and preserved the banking business through transfer to HSBC.
The BCCI question is therefore not whether the legal resolution powers available in 2023 existed in 1991.
They did not.
The more fundamental issue is one of regulatory philosophy:
when a viable private solution exists, should regulators seek to preserve banking value and customer relationships before choosing the irreversible course of closure?
That principle was applied to SVB UK in 2023.
Whether comparable consideration was afforded to BCCI’s privately financed restructuring in 1991 remains a legitimate question in examining Double Standards.
Also read:
- Why did Silicon Valley Bank collapse? And how did HSBC rescue its UK arm?: London Daily 22 August 2026
- Bank of England, “Statement on Silicon Valley Bank”, 13 March 2023. Sets out the Bank’s assessment of SVB UK’s failure and the purpose of its resolution powers.
- Bank of England, “Past Resolution Actions - Silicon Valley Bank UK”. Confirms that the Bank initially intended to use the Bank Insolvency Procedure but changed course after a credible private-sector purchaser emerged, transferring SVB UK to HSBC.
- HM Treasury, “Government and Bank of England facilitate sale of Silicon Valley Bank UK”, 13 March 2023. Official announcement of the HSBC acquisition and continuity of customer deposits and banking services.
- Bank of England, The Bank of England’s Approach to Resolution (2023). Explains the modern UK resolution framework and specifically identifies the SVB UK transfer as a private-sector resolution.
- Bank of England, Report under section 79A of the Banking Act 2009 on the transfer of SVB UK to HSBC UK (2024). Provides further official detail concerning the valuation and resolution process used during the weekend of 11–12 March 2023.
- UK legislation and explanatory material relating to the SVB UK resolution. Records the legal measures taken to facilitate the private-sector transfer to HSBC.
- Double Standards: The Forced Closure of the BCCI Bank. For comparison with BCCI’s closure and the question of whether preservation and privately funded restructuring received equivalent consideration.
