'If this proves true, I expect there will be bank runs beginning Monday am,' said billionaire Bill Ackman. SVB SiliconValleyBank
Billionaire Warns of Imminent Bank Runs if Government Fails to Guarantee All SVB Deposits
He stressed that unless JPMorgan, Citibank, or Bank of America acquires Silicon Valley Bank before Monday’s market open, or the government provides a guarantee for all of SVB’s deposits, “the giant sucking sound you will hear will be the withdrawal of substantially all uninsured deposits from all but the ‘systemically important banks’ .”
“Already thousands of the fastest growing, most innovative venture-backed companies in the U.S. will begin to fail to make payroll next week,” he added. Moreover, he noted that the increased demand for short-term UST “will drive short rates lower complicating the Federal Reserve’s efforts to raise rates to slow the economy.
The Pershing Square executive shared that his “back-of-the-envelope review of SVB’s balance sheet suggests that even in a liquidation, depositors should eventually get back about 98% of their deposits.”
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