Following the collapse of Silicon Valley Bank, owned by its holding company SVB Financial Group (NASDAQ: SIVB), hedge fund manager Bill Ackman called for immediate action from the government.
What Happened: “The gov’t has about 48 hours to fix a soon-to-be-irreversible mistake,” Ackman said. By allowing SVB to fail without protecting all depositors, people are left to face the ugly prospect of realizing what an “unsecured illiquid claim” on a failed bank is, he suggested on Twitter.
Ackman also raised the possibility of bank runs on all, but the “systemically important banks,” under either of the following scenarios:
If SVB is not acquired by JPMorgan Chase & Co. (NYSE: JPM), Citigroup, Inc. (NYSE: C) or Bank Of America Corp. (NYSE: BAC) before the market opens on Monday
The government isn’t guaranteeing all of SVB’s deposits.
Ackman sees the first possibility as remote. These withdrawn funds will likely be transferred to SIBs (social impact bonds), U.S. Treasury money market funds …
