Billionaire investor Bill Ackman said Friday that Bank of America (NYSE: BAC) will buy Signature Bank (NASDAQ: SBNY) on Monday, as bigger systemic banks continue in their efforts to rescue distressed smaller banks.
The CEO of Pershing Square Capital Management has recently campaigned for an unlimited systemwide guarantee on deposits, in contrast to Treasury Secretary Janet Yellen, who reaffirmed the $250,000 insurance cap this week.
Until a full deposit insurance is achieved, the cost of capital for smaller banks will rise, forcing them to merge or be bought by bigger institutions, in Ackman’s view.
“I am hearing that Bank of America is going to buy Signature Bank on Monday. Unless and until we can protect uninsured deposits, the cost of capital is going to rise for smaller banks pushing them to merge or be acquired by the SIBs. I don’t think this is good for America,” Ackman wrote on Twitter.
Benzinga has contacted Bank of America for comment on Ackman’s remarks.
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