The UK subsidiary of Silicon Valley Bank (SVB UK) is insolvent. That means there will be losses. But if the Bank of England chooses the wrong course, those losses will be far greater than they need to be – causing damage to jobs, human welfare, innovation, and UK taxpayers.

Many UK commentators have not yet grasped this, but the question is not whether the Government should avoid moral hazard by refusing to bail out the bank. The question is whether the Bank of England should be trying to bail in the bank – without using any taxpayer money – rather than simply giving up and putting SVB UK into a Bank Insolvency Procedure, as it said on Friday that it planned to do. A bail in would avoid unnecessary damage to the economy and unnecessary costs to the taxpayer.