‘We are running out of time to fix this problem’ — Bill Ackman’s latest warning on regional banks We are running out of time to fix this problem. How many more unnecessary bank failures do we need to watch before the FDIC, the U.S. Treasury, and our government wake up? We need a system-wide deposit guarantee regime now.
That was hedge-fund billionaire Bill Ackman back with his two cents on the regional-banking system following the collapse of First Republic Bank and its subsequent takeover by JPMorgan Chase & Co. JPM, -2.00% earlier this week. On Wednesday night, shares of fellow regional lender PacWest Bancorp PACW, -47.82% plummeted after a report it was considering strategic options.
Ackman, who is CEO of Pershing Square Capital Management, said in a long tweet early Thursday that First Republic Bank would not have failed if the Federal Deposit Insurance Corp. had temporarily guaranteed deposits while the sector waits for a new guarantee regime to be created.
“Instead, we watch the dominoes fall at great systemic and economic cost,” he said.
“At this rate, no regional bank can survive bad news or bad data as a stock price plunge inevitably follows, insured and uninsured deposits are withdrawn and ‘pursuing strategic alternatives’ means an FDIC shutdown over the coming weekend,” he added. “And there is no incentive to bid until Sunday after the failure.”...............
https://www.marketwatch.com/story/we-are-running-out-of-time-to-fix-this-problem-bill-ackmans-latest-warning-on-regional-banks-c8993161?mod=home-page
