‘Shark Tank’ investor Kevin O’Leary says he’s telling startup CEOs to limit bank deposits and brace for the next ‘black swan idiot’ blowup

Kevin O’Leary.

“Shark Tank” investor Kevin O’Leary is advising his CEOs to limit their deposits at banks.
That comes after the blowup of SVB, which was caused by “idiot” bank managers, O’Leary said.
“There’s always the next black swan idiot manager in big and small banks,” O’Leary said.

“Shark Tank” investor Kevin O’Leary is advising startup CEOs he works with to limit their bank deposits in the wake of the Silicon Valley Bank implosion, and says firms need to brace for other possible bank collapses, he warned.

“We’ve told our CEOs: do not put any more than 20% of liquid assets in any one institution. I don’t care who you know or how big they are, there’s always the next black swan idiot manager in big and small banks. So we don’t know who they are,” O’Leary said in an interview with Yahoo Finance on Wednesday.

His comments come shortly after the failure of Silicon Valley Bank last Friday. 

Its collapse has sparked a steep-sell off in bank stocks and fears of a 1980s-style banking crisis, but he problems are less systemic and more due to the “idiot management” at SVB, and an “incompetent board” that “knew nothing about banking,” O’Leary said.

He added that assets of some his own companies were tied up in the bank, though he didn’t disclose the total amount.

In particular, O’Leary blasted the SVB’s high exposure to long-term bonds. Bond prices have sunk over the past year amid the Fed’s interest rate hikes to control inflation, leading to $620 in unrealized losses across all US banks, according to estimates from the FDIC. 

Other commentators have said that the risk of contagion from Silicon Valley Bank’s fallout is low, but O’Leary remains concerned over the impact of regulators’ response to the crisis, making …read more

Source:: Businessinsider

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