Shark Tank’s Kevin O’Leary blasts SVB’s downfall of ‘stupid management’ and ‘reckless directors’

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shark TankKevin O’Leary has made a career of calling businesses out on their weaknesses, and now the owners have collapsed Silicon Valley Bank Unsurprisingly, that caught the attention of the self-proclaimed Mr. Wonderful.

SVB explodes and investors and depositors are seen trying hard after a bank run by the Federal Deposit Insurance Corporation on Friday withdraw 42 billion dollars When VCs advised businesses to start withdrawing funds.

US Federal Reserve on Sunday night Said will ensure that depositors at Silicon Valley Bank and signature bankEven those that failed over the weekend were fully protected, even in excess of the $250,000 normally covered under federal deposit insurance.

O’Leary, reportedly worth $400 millionWhile in doubt as to who was to blame, he tweeted: “The combination of the reckless Board of Directors of @SVB with the stupid management is a potent cocktail that led to disastrous results.”

Similar sentiments have been echoed by Citadel founder and CEO Ken Griffin, who said the government should not have intervened as the bank’s collapse would have been “a great lesson in moral hazard”.

talking to financial Times On Monday, he said: “It drives home that risk management is essential.”

SVB employees have labeled its CEO, Greg Baker, as an “idiot”.

talking to CNNAn anonymous employee said that Baker’s transparency around the institution’s finances “turned him in.”

Canadian mogul O’Leary, president of O’Leary Ventures, questioned why taxpayers should bail out the bank.

However, Treasury officials have confirmed that no taxpayer money will be used to return the cash to investors and businesses.

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A senior Treasury spokeswoman told CNBC on Sunday: “For the banks that were placed into receivership, the FDIC will use funds from the Deposit Insurance Fund to ensure that all of its depositors are covered.”Deposit Insurance The fund is bearing the risk. It is not taxpayer money.

In fact O’Leary’s comments about the bailout are also inconsistent with those of his fellow shark Mark Cuban.

Cuba explained over the weekend that it does not see government support as a bailout for depositors.saying: “I don’t call it a bailout and some people gave me a hard time for it, only because I think there are good assets and if you’re buying good assets and that solves the liquidity problem It is not a bailout. He is taking care of the liquidity side of the problem and your risk is the delta.

“The lesson is simple, never put more than 20% of your liquid assets in any one financial institution,” O’Leary concluded.

Biden ‘nationalized the US banking system’

in a separate interview with CNNO’Leary claimed that President Biden had “nationalized the American banking system.”

He said: “It is no longer a risk. It is no longer private in any way. It is now backstopped by the government, ultimately the taxpayer.

“So it doesn’t matter how bad you are as a bank manager, and what happened at Silicon Valley Bank is a good example. It was a combination of a reckless board of directors and stupid management.

“It completely wiped out that bank and that’s exactly what should have happened.”

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Speaking on the level of insurance being raised to an undisclosed amount from the previous limit of $250,000 under the new government aid, O’Leary said: “Now you have no exposure to any bank at any time, and you are the taxpayer’s Let’s move forward as.

“This quick move was to try and prevent a run on small banks and medium banks. I don’t think it’s going to work for the long term because why would you risk 1% to keep your money, or at least All this at a small regional bank?”

He said the lesson is to diversify assets among financial institutions because you “never know where the black swan is swimming.”

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