It will be yet another bailout for failed bankers. It will simply encourage yet more risk-taking in the City. It only impacts a tiny number of tech companies and venture capital funds, and anyway we can’t afford it. As the London arm of Silicon Valley Bank – which has gone spectacularly bust over the weekend – is closed down by the Bank of England, there will be plenty of pressure on the Chancellor Jeremy Hunt not to offer any extra money to its depositors beyond what they are entitled to under the existing compensation scheme. The trouble is, that would be a big mistake. If necessary it will have to be rescued.

A full-blown banking crisis was probably not what Hunt was hoping for as the backdrop to his first Budget this week. And yet that is what he will have to confront. Not many of us had heard of Silicon Valley Bank until a few days ago, but it turns out it was the 17th largest bank in the United States, holding billions of dollars in deposits for clients mainly drawn from California’s booming tech industry. Caught out by rising interest rates, falling bond prices and appalling risk management, the bank has failed spectacularly. Over on this side of the Atlantic, its London branch is now set to be wound up, under the supervision of the Bank of England.

Hunt and the Bank of England have already said they are monitoring the situation. In reality, they will need to go a lot further than that. Deposits up to £85,000 will be protected by the Financial Services Compensation Scheme, but beyond that no one yet knows whether there will be extra help. A decision will have to be made, and made fast.

Sure, it is easy to understand the reasons for doing nothing. SVB is mainly a business bank, and the losers will be small tech companies and their backers, not ordinary people. No one wants to replicate the bailouts of 2008 and 2009 that ended up taking years to unwind. Nor is there exactly a lot of spare cash floating around at the Treasury right now. Even so, Hunt and the Bank of England Governor Andrew Bailey will have to do more. There are two big reasons for that. The first is that the tech companies that bank with SVB are the fastest growing, most productive sector of the British economy, and we can hardly afford to lose them. The second is that if bank deposits are not protected in full then confidence in the entire financial system, and very quickly in paper money as well, will very quickly evaporate. And the UK would then be facing a much larger bank run. No one wants another bank bailout.

Over the week ahead, Hunt and the Prime Minister Rishi Sunak will have no choice. They will need to step up and put some money behind the London branch of SVB, or face a real crisis.