Kevin O’Leary is swearing off financial institution shares.
The federal authorities’s determination to backstop all of the deposits in failed banks Silicon Valley and Signature Bank — even deposits above the FDIC’s federally insured threshold of $250,000 — marked a basic change within the U.S. banking system, based on Kevin O’Leary.
“It is no longer a risk. It’s no longer private in any sense. It is backstopped by the government, ultimately the taxpayer. So it doesn’t matter how bad you are as a bank manager,” O’Leary informed CNN.
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The banking system will “never go back to normal” after the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corp. stated that it might insure all deposits at SVB and Signature, based on O’Leary.
According to the Shark Tank host, accounts with greater than $250,000 are both enterprise accounts or subtle traders. So if a financial institution will get “wiped out” like SVB did these deposits knew the dangers concerned.
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“Now you have no risk in any bank at any time. And you as the taxpayer have to bear that going forward,” O’Leary stated.
He says that the banking system has now been “nationalized” and that you must take into account the banking system and monetary companies as “nothing more than highly regulated utilities… and if you thought putting your money into bank stocks was a good idea, you should change your mind forever. And should you own bank bonds? Never.”
