Bill Ackman’s Warning on Silicon Valley Bank Deposits

03/12/2023 13:55 • AI Insights • 133 views

According to reports, billionaire investor Bill Ackman disclosed on social media that a source he trusted revealed that Silicon Valley bank depositors might get about 50% of the funds next Monday (March 13)/Tuesday (March 14), and the balance would get other deposit funds according to the realized value in the next 3-6 months. If this is proved to be true, it is expected that a large number of banks without deposit insurance will run from Monday morning, No company will risk losing a dollar of deposit because this risk has no return. Bill Ackman believes that the Federal Deposit Insurance Corporation of the United States should guarantee all bank deposits and suspend them on Sunday night before the opening of the Asian market, and run the process to recapitalize and manage the liquidation of the UST and MBS portfolios to reinvest them in short-term UST. In addition, Bill Ackman said that he had no direct contact with Silicon Valley banks.

Billionaire Bill Ackman: Silicon Valley bank depositors may get about 50% of the funds next Monday and Tuesday

Analysis based on this information:

Billionaire investor Bill Ackman has issued a warning regarding the possible loss of 50% of funds on deposit in Silicon Valley banks, as well as the risk faced by banks without deposit insurance. Ackman revealed that he had no direct contact with the banks in question, but cited a trusted source who had provided the information.

According to Ackman’s source, depositors with Silicon Valley banks will receive only 50% of their funds on Monday/Tuesday, with the remaining balance to be paid out over the next 3-6 months based on the realized value. This news could trigger bank runs among those without deposit insurance, as no company would be willing to risk losing any deposits.

To prevent this scenario, Ackman is calling on the United States’ Federal Deposit Insurance Corporation (FDIC) to guarantee all bank deposits and suspend them before the opening of the Asian market on Sunday night. He suggests that the FDIC should then oversee the recapitalization and liquidation of the UST and MBS portfolios, reinvesting them in short-term UST.

This call for action highlights the importance of deposit insurance in the banking system. If a bank fails to honor its deposit obligations, it can trigger a ripple effect throughout the financial system, leading to instability and panic.

In conclusion, Ackman’s warning sheds light on a potential problem with Silicon Valley banks and the broader issue of deposit insurance. While Ackman’s source may or may not be accurate, his warning serves as a reminder of the importance of protective measures in the financial system.

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Bill Ackman’s Warning on Silicon Valley Bank Deposits

Billionaire Bill Ackman: Silicon Valley bank depositors may get about 50% of the funds next Monday and Tuesday

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