SBNY - Bill Ackman says more banks will fail but now have government 'roadmap' to manage them

2023-03-12 23:22:48 ET

Pershing Square CEO Bill Ackman said Sunday night that in light of the closures of Silicon Valley Bank ( NASDAQ: SIVB ) and Signature Bank ( NASDAQ: SBNY ), other banks are likely to fail, even with government intervention.

However, the hedge fund investor isn't gloomy about the future of the banking sector. "We now have a clear roadmap for how the gov't will manage them," he wrote in a Tweet.

Ackman said that with the federal government's actions on Sunday in shoring up the two shuttered banks, "our gov't did the right thing," adding that unlike the Global Financial Crisis of 2007-08, the government isn't bailing out banks.

"The people who screwed up will bear the consequences, who didn't adequately oversee their banks will be zeroed out and the bondholders will suffer a similar fate."

Ackman added that the government's actions will boost depositors' trust in the banking system. "Without this confidence, we are left with three or possibly four too-big-to-fail banks where the taxpayer is explicitly on the hook, and our national system of community and regional banks is toast."

On Saturday, Ackman tweeted that without a "systemwide (FDIC) deposit guarantee," there will be more bank runs .

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