Federal Government Has 48 Hours to Fix ‘Irreversible Mistake,’ Billionaire Says

Contact Your Elected Officials
The Epoch Times Header

Home Depot founder notes that SVB collapse should be a ‘wake up’ call

Several billionaires issued warnings over the weekend after the Silicon Valley Bank suddenly collapsed late last week and forced the federal government to step in.

Billionaire investor Bill Ackman wrote Saturday that the federal government had about two days to fix the problem—by Monday morning. He noted that a number of depositors may not see their money because it wasn’t insured; the Federal Deposit Insurance Corporation (FDIC) notes it insures $250,000 per depositor, per insured bank for each account.

The shuttering of the bank, known as SVB, was announced by the FDIC, marking the worst failure of an American financial institution since 2008.

“The gov’t has about 48 hours to fix a-soon-to-be-irreversible mistake,” Ackman pohttps://www.youtube.com/watch?v=4x80mTMpk6Usted on Saturday morning. “The giant sucking sound you will hear will be the withdrawal of substantially all uninsured deposits from all but the ‘systemically important banks’ (SIBs),” he wrote, adding that more “withdrawals will drain liquidity from community, regional, and other banks and begin the destruction of these important institutions.”

Before Friday’s collapse, SVB was one of the top 20 largest banks in the country, sparking fears that its failure could trigger contagion that would impact other financial or technology companies. The bank failed as depositors rushed to withdraw their money over concerns about the bank’s status and as the firm’s stock prices cratered by 86 percent this week.

“Already thousands of the fastest growing, most innovative venture-backed companies in the U.S. will begin to fail to make payroll next week,” Ackman, the billionaire founder and CEO of hedge fund Pershing Square Capital Management, warned on Twitter. “Had the gov’t stepped in on Friday to guarantee SVB’s deposits (in exchange for penny warrants which would have wiped out the substantial majority of its equity value) this could have been avoided and SVB’s 40-year franchise value could have been preserved and transferred to a new owner in exchange for an equity injection.”

Ackman said that the federal government should have gotten involved quicker because the bank’s collapse could reverberate across the U.S. economy and banking sector at large.

By Jack Phillips

Read Full Article on TheEpochTimes.com

Biden Doesn't Have Americans Best Interest At Heart