London– Billionaire hedge fund manager Bill Ackman says more banks will probably fail even if U.S. authorities step in to shore up confidence in the banking system after last week’s collapse of Silicon Valley Bank, Daily Mail reported.
Ackman, whose hedge fund Pershing Square Capital Management oversees roughly $16 billion in assets, criticized the government’s response on Saturday as he predicted “economic meltdown” within hours of the banks opening on Monday morning.
The Federal Reserve on Sunday night announced that all those with money in SVB will get their money back, while stressing no taxpayer money will be needed to cover the losses because the body is funded from its own financial operation.
Ackman, who had urged the U.S. government to step in and protect all of the bank’s depositors, praised the move but warned it unlikely to prevent more financial institutions from collapsing, Daily Mail reported.
“Had the @FDICgov @USTreasury and @federalreserve not intervened today, we would have had a 1930s bank run continuing first thing Monday causing enormous economic damage and hardship to millions,” he wrote.
“More banks will likely fail despite the intervention, but we now have a clear roadmap for how the gov’t will manage them”, he wrote.
U.S. regulators said the failed bank’s customers will have access to all their deposits starting on Monday morning – even those above the $250,000 federally-guaranteed limit.
“Our gov’t did the right thing. This was not a bailout in any form. The people who screwed up will bear the consequences. The investors who didn’t adequately oversee their banks will be zeroed out and the bondholders will suffer a similar fate,” Ackman stated, Daily Mail reported. (IANS)