Throughout an look on FNC’s “Hannity,” “Shark Tank” panelist Kevin O’Leary blasted now-failed Silicon Valley Financial institution administration for the establishment’s demise.
He was additionally crucial of the federal authorities’s response, which he mentioned ought to have been to permit the financial institution to fail.
“This bank was run by idiots, with an incompetent board,” O’Leary mentioned. “It’s one bank. No one ever heard the name before. Now, it’s international.”
“How do you keep your money — Kevin, you’re a smart guy,” host Sean Hannity replied. “Why did you keep your money there if it was run by idiots?”
“No, no, it’s one of many, many banks I keep my money in,” O’Leary mentioned. “And look, I’m a big boy, and my whole point is, if you have more than $250,000 in any institution, you’re basically a hedge fund or a savvy investor or a business. You understand your risks, and you act accordingly. So I think the Fed’s mandate about keeping FDIC insurance at makes sense to me. But we changed all that over the weekend. And we said it doesn’t matter how much you have. And I understand we want to keep confidence in the banking system, what I would have preferred is to allow this bank run by idiots, and I’m sorry to say these harsh words, but it’s a fact. This is a — these the — you know, Silicon Valley Bank is the poster boy for idiot management now, that brand is radioactive waste.”
“And so, at the end of the day, let this thing go under because that’s our democratic, you know, capitalist system, because when you’re an idiot and it goes to zero, that’s OK,” he continued. “Most of the people that had money, including me, above $250,000 in my portfolio companies, we can take the hit, I get it. That happens sometimes. But I’ll tell you what I’ve done since then. I’ve told all my CEOs and all of our portfolios we don’t want any more than 20 percent in any one institution, so we diversified across many institutions. And frankly, what I see now as a — as an investor in bank stocks, I won’t invest anymore because you’re basically telling me that from now on, the regulatory environment on small regional banks is going to be so punitive, I don’t think they can make money anymore.”
“Remember this — this is the really key issue for everybody in America to think about,” O’Leary added. “There are 11 sectors in our economy. We are the greatest economy on earth. One of those financial services. It’s the only sector that services all other 10. We have to make a decision. Do we want to turn this into utility to service the other 10, or do you want to be private? If it’s private, you have to let the idiots go to zero, and we didn’t do that this weekend.”
Observe Jeff Poor on Twitter @jeff_poor
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