UK Offshoot of Failed US Bank Sells for ... $1.21

These are tense days in the world of banking, as seen in an unusual price tag Monday morning: HSBC will acquire the British subsidiary of Silicon Valley Bank for all of 1 British pound, reports the BBC. That's the equivalent of about $1.21. SVB, of course, is the American bank that failed last week, and UK regulators approved the HSBC acquisition as a way to ensure that British depositors won't lose their money, per the Wall Street Journal. In the US, bank regulators haven't found a similar buyer for SVB, but they took "extraordinary" steps to ensure that nobody will lose their money in this country, either.

Despite its California-focused name, SVB had a global footprint, notes Axios, and "the acquisition of pieces of Silicon Valley Bank and its parent company could make the American bank more attractive to buyers by making it smaller and cheaper," writes Kia Kokalitcheva. The failure of SVB was the second-largest such bank collapse in US history, and it was quickly followed by the third-largest with the collapse of Signature Bank over the weekend. The question is whether the contagion will spread, particularly among smaller, regional banks.

“I think this could be the first cockroach in the cellar,” Fredric Russell of Fredric E. Russell Investment Management Co. in Oklahoma tells the Journal of the SVB failure. “Banks get thrown into the dark pool of complacency, and then they lower their quality standards.” The US move to backstop depositors' money—even those above the usual insured threshold of $250,000—is likely to trigger what the Washington Post describes as a "political firestorm" over the decision to protect the assets of tech investors. (More banking industry stories.)