Billionaire Bill Ackman has urged the United States government to “guarantee” all deposits held by Silicon Valley Bank (SVB) within the next “48 hours,” or it risks the “destruction” of many financial institutions.
In a Mar. 11 tweet, Bill Ackman, CEO of hedge fund management firm Pershing Square, said a “giant sucking sound” will be heard from the ”withdrawal of substantially all uninsured deposits,” from all banks, besides the “systemically important banks (SIBs),” should the government fail to “guarantee all” of SVB’s deposits before the “open on Monday.”
Ackman suggested that this would be the result of “the world” realizing what an uninsured deposit is – “an unsecured illiquid claim on a failed bank.”
He warned that these withdrawals will “drain liquidity,” from community, regional and other banks and “begin the destruction” of these crucial institutions, if the U.S. government fails to protect “all depositors.”
Ackman said that the only other way to prevent this from happening, was in the “unlikely” event that major financial institutions such as J.P. Morgan, Citibank or Bank of America, acquire SVB before Monday.
It was argued by Ackman that this all could have been “avoided” if the U.S. government had “stepped in on Friday” to guarantee SVB’s deposits, adding that the…
