Olivier Douliery | AFP | Getty Images

The Bank of England said on Friday it was seeking a court order to place Silicon Valley Bank UK Limited into insolvency proceedings, after US regulators took over its parent company, SVB Financial Group, earlier in the day.

“SVB UK has a limited presence in the UK and no critical functions supporting the financial system. In the meantime, the company will stop making payments or accepting deposits,” the BoE said.

Under UK bank insolvency proceedings, some depositors are entitled to up to £85,000 ($102,000) in compensation for lost deposits, or £170,000 for joint accounts.

Other assets and liabilities would be handled by the bank’s liquidators and any recovered funds would be transferred to creditors, the BoE said.

Bank failures are rare in the UK, with only two lenders going through the BoE’s resolution procedures since 2009.

Earlier on Friday, the Financial Times reported that SVB’s UK arm had sought £1.8bn of liquidity from the BoE via its discount window, which offers emergency funding to banks if they have sufficient collateral.

Silicon Valley Bank UK said earlier on Friday that it was a stand-alone entity with an independent board, separated from the parent company and other subsidiaries.

US banking regulators took over parent company SVB earlier on Friday in a bid to protect depositors after the biggest bank failure since the financial crisis saw the global banking sector shed billions in market value.

The rout in SVB’s stock, which began on Thursday, has spread to other American and European banks. U.S. banks have lost more than $100 billion in market capitalization and European banks have lost another $50 billion in value over the past two days, according to a Reuters calculation.