Shark Tank star Kevin O’Leary says that the banking crisis is now in that part of determining which of the US regional banks will keep standing.
In a new interview on Fox Business, O’Leary says that major US banks should no longer rescue bankrupt banks because their collapse is due to poor management.
The statement comes as several regional banks including PacWest Bancorp and Western Alliance Bancorporation saw big losses this week.
“A regional bank goes bankrupt, so what? Anybody that had $250,000 or less is covered by the FDIC insurance, which is basically paid for by you as a fee payer when you put money into any bank and so the banks are paid for the banks.”
O’Leary says incompetent managers should be purged out of the system and letting go of insolvent banks will not shut down the American economy.
“The point is idiot managers are expensive… Clearly they’re not good bankers. We can’t keep them around. They’ve got to go. In any other sector when you fail, you get fired. It’s okay. Let’s whack them. Let’s shut the banks down and consolidate to super regionals like every other country has done. It’s not the end of the world.”
The celebrity investor says shutting down these banks may even be beneficial in the long run.
“Everybody relax. It’s a very good process. Let them fail.”
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