Ackman worried about ‘contagious risk’ spiraling out of control

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(Bloomberg) — Diffusing the risk of a financial contagion to gain a “false sense of confidence” at First Republic Bank is “bad policy,” Pershing Square’s Bill Ackman said in a tweet.

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The activist investor said the moves by the largest US banks to deposit $30 billion with First Republic “raise more questions than answers.” The plan was drawn up with US regulators and included contributions from JPMorgan Chase & Co, Bank of America Corp, Citigroup Inc, Wells Fargo & Co, Goldman Sachs Group Inc and Morgan Stanley.

“I have said that hour before. We have let the days go by. Half-measures do not work when there a crisis of confidence,” he said.

First Republic receives $30 billion in fresh deposits in bank rescue

Ackman reiterated that he has no investments, long or short, in the banking sector. “I am extremely concerned about the financial contagion risk spiraling out of control and causing serious economic damage and hardship,” he said.

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