THE IRISH FINANCIAL Stability Group (IFSG) in the Department of Finance has set up a sub-group to respond to any knock-on effects in Ireland arising from the collapse of Silicon Valley Bank (SVB).

US regulators pulled the plug on SVB on Friday in a spectacular move that sent global banking shares sputtering, as markets fretted over possible contagion from America’s biggest banking failure since the 2008 financial crisis.

A statement from the Department of Finance today said the bank had a significant number of Irish businesses among its clients.

The IFSG, which is comprised of senior officials in the Department of Finance, the National Treasury Management Agency and the Central Bank of Ireland, met yesterday to assess the situation and any effects it could have on Ireland’s financial system.

Finance Minister Michael McGrath said in a statement: “It is important to highlight the limited direct impact on the Irish financial system of the failure of Silicon Valley Bank.

The retail banks operating in Ireland have no exposure to this bank

“The swift actions taken by regulatory authorities in the US and the UK are important in ensuring that SVB clients can access their deposits and credit facilities.”

McGrath added: “The sub group will meet and engage on a regular basis and report to me on developments as they arise.”

The Ireland Strategic Investment Fund (ISIF) said the around $100m it had invested in five funds managed by SVB Capital, a subsidiary of the Silicon Valley Bank (SVB) Financial Group, would not be impacted by the panic that had started on Thursday with a massive drop in share price and a subsequent share sale.

“This means ISIF does not expect any impact on these investments arising from SVB Financial Group’s announcement that it will issue additional shares in the group,” a spokesperson for ISIF told RTÉ.

“The distributions received by ISIF from these investments since 2012 exceed the amount currently invested.”

In addition to taking deposits and making loans, SVB operated venture capital and private equity divisions that sometimes invested in the firm’s commercial banking clients.

It focused on lending to tech companies, providing services to venture capital, revenue-based financing and private equity firms that invest in technology and biotechnology.

The US Department of Justice (DOJ) has opened an investigation into the collapse of the bank after customers rushed to withdraw their deposits, US media reported today.

The US Federal Reserve announced on Sunday that an emergency lending facility called the Bank Term Funding programme is being launched to support the US banking system in the wake of the collapse o SVB, the 16th-largest financial institution in the country.

SVB also had a UK subsidiary, SVBUK. The UK government announced the sale of SVBUK yesterday morning to HSBC for £1. In the case of the US and the UK, depositors in the bank are to be protected.