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Bill Ackman warns of potential bank run in Silicon Valley

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Bill Ackman warns of potential bank run in Silicon Valley

According to reports, billionaire investor Bill Ackman disclosed on social media that a source he trusted revealed that Silicon Valley bank depositors might get about 50% of the funds next Monday (March 13)/Tuesday (March 14), and the balance would get other deposit funds according to the realized value in the next 3-6 months. If this is proved to be true, it is expected that a large number of banks without deposit insurance will run from Monday morning, No company will risk losing a dollar of deposit because this risk has no return. Bill Ackman believes that the Federal Deposit Insurance Corporation of the United States should guarantee all bank deposits and suspend them on Sunday night before the opening of the Asian market, and run the process to recapitalize and manage the liquidation of the UST and MBS portfolios to reinvest them in short-term UST. In addition, Bill Ackman said that he had no direct contact with Silicon Valley banks.

Billionaire Bill Ackman: Silicon Valley bank depositors may get about 50% of the funds next Monday and Tuesday

Analysis based on this information:


Billionaire investor Bill Ackman has warned on social media that depositors in Silicon Valley banks could receive only 50% of their funds next Monday or Tuesday, with the rest being paid out according to the realised value over the next three to six months. This rumour, if confirmed, could lead to banks without deposit insurance being at risk of a run on deposits. In his post, Ackman argued that the Federal Deposit Insurance Corporation (FDIC) should guarantee all bank deposits and suspend them just before the Asian market opens on Monday morning. He also proposed a process for recapitalising and managing the liquidation of the UST and MBS portfolios and reinvesting them in short-term UST.

Ackman’s comments echo growing fears that the banking industry may face a liquidity crisis if major banks fail. Over the past decade, there has been a trend of banks relying more heavily on wholesale funding markets such as repurchase agreements (repos), which could freeze their funding in the event of a crisis. Ackman has previously spoken on this topic, arguing that the banking industry should be further regulated to ensure greater stability.

There are several potential reasons for Ackman’s warning about Silicon Valley banks, but no specific bank has been named. It is possible that he has been tipped off about a bank’s particular vulnerability or he may be reacting to market rumours about the sector. Whatever the case may be, the rumour has made many nervous about the potential impact on the banking industry, even if it is ultimately unfounded.

The proposal by Ackman to suspend bank deposits so that they may be guaranteed and recapitalised is one option for preventing a run on deposits. However, such an approach could also trigger a panic among depositors who may worry about the solvency of banks. This would not be an ideal scenario for the stability of the banking industry.

In summary, Ackman’s warning is a timely reminder of the risks faced by the banking industry and the need for greater regulation to ensure financial stability. It is also a reminder that the sector is subject to rumours, which can be destabilising, even if the underlying causes are not immediately clear.

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