Famous billionaire Bill Ackman has waded into the Silicon Valley Bank issues presently being talked about across the United States. Reacting to the news, the billionaire tasked the government with making sure all deposits in the bank are guaranteed over the next 48 hours, or financial institutions in the country risk getting destroyed.
Bill Ackman says the government needs to react
Bill Ackman said that if the government fails to react to all deposits not insured at the banks, it could spell doom for them. The billionaire mentioned that he feels users would head to the banks on Monday morning to withdraw all their funds. However, he noted that this might not be an issue for popular banks because they always have a way of insuring users’ funds. The billionaire also said this issue would open people’s eyes to the dangers of having uninsured deposits in a failed financial institution.
He said that banks could get destroyed if the government fails to intervene and people withdraw all their funds. However, he noted that the only way to eliminate this possibility is to ensure that one of the top banks purchases the embattled financial institution before Monday morning.
Analysts want FDIC to help SVB
The billionaire argued that the government could have stopped this catastrophic chain of events from happening had they stepped up to guarantee depositors funds on Friday. He also said that the bank would have saved its reputation by transferring ownership to another top bank on the spot for small equity. Bill Ackman said that some of the executives of SVB made costly mistakes, and they should answer for it. He mentioned that the people who are top management at the bank deserve to be fired.
Ackman noted that investors can still recoup about 98% of their value. This was after he said he had conducted a small estimate. Ackman also mentioned that the FDIC needs to come out to say it will insure all deposits at the bank along with a plan to tackle the whole situation. This statement off the back of a similar one by Bob Elliot of Unlimited, where he mentioned that the future of financial institutions in the country lies in the actions of the FDIC. He said that about a third of the deposits in the US are sent into smaller banks, with only half of that fraction being insured.