'Shark Tank' investor Kevin O'Leary says he's telling startup CEOs to limit bank deposits and brace for the next 'black swan idiot' blowup
and fears of a 1980s-style banking crisis, but he problems are less systemic and more due to the"idiot management" at SVB, and an"incompetent board" that"knew nothing about banking," O'Leary said.
He added that assets of some his own companies were tied up in the bank, though he didn't disclose the total amount. In particular, O'Leary blasted the SVB's high exposure to long-term bonds. Bond prices have sunk over the past year amid the Fed's interest rate hikes to control inflation, leading torisk of contagion from Silicon Valley Bank's fallout
is low, but O'Leary remains concerned over the impact of regulators' response to the crisis, making all of SVB and Signature Bank's depositors whole, even above the typical $250,000 deposit threshold. That upends the FDIC's usual standards for deposit insurance, and it inherently makes bank stocks more risky, O'Leary said, as bank managers may now feel free to take on more risk to boost stock prices, even if it endangers the safety of deposits. as the precedent set by SVB's collapse means the government has"nationalized" the sector. , another regional bank under pressure, by injecting $30 billion of deposits.
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