SVB collapse: Hedge fund manager Bill Ackman warns ‘more banks will likely fail’

Despite government intervention in the Silicon Valley Bank collapse, more banks are still likely on the road to failure, Pershing Square founder Bill Ackman warned.

Ackman cheered and defended the government’s decision to guarantee deposits above the federally insured ceiling of $250,000, stressing it “was not a bailout in any form” and that the government has provided a roadmap for addressing the coming storm of potential bank failures.

SILICON VALLEY BANK COLLAPSE: U.S. OFFICIALS REPORTEDLY WEIGH BACKSTOPPING DEPOSITORS

“More banks will likely fail despite the intervention, but we now have a clear roadmap for how the gov’t will manage them. Bank boards and managements have received a massive wake up call,” Ackman warned in a lengthy tweet.

On Sunday the heads of the Federal Reserve, Treasury Department, and Federal Deposit Insurance Corporation announced that depositors in SVB will get access to their money on Monday, backstopping deposit withdrawals in a move intended to stave off contagion, or spread of SVB-induced panic across the financial system.

SVB, the 16th largest federally insured bank, suddenly collapsed last Friday and was taken over by regulators after announcing it needed to raise over $2.2 billion to stay solvent. Earlier in the week, SVB spooked investors when it revealed that it sold treasuries at a loss, prompting a run on the bank.

Critics have bristled at the government’s actions, decrying it as a de facto bailout. The actions came after the FDIC reportedly commenced an auction for SVB. Treasury Secretary Janet Yellen appeared to rule out a traditional federal b