Fox News host Sean Hannity confronted business tycoon Kevin O'Leary on Tuesday over his decision to keep money in the now-defunct Silicon Valley Bank if, as he says, it was run by "idiots."
During an interview on Fox News, O'Leary confirmed that "many companies" in his private equity portfolio deposited money in SVB but conceded that SVB should not be bailed out.
"This bank was run by idiots with an incompetent board," O'Leary said. "It's one bank, no one ever heard the name before."
The admission, and characterization of the individuals in control of SVB, led Hannity to respond with a blunt question.
"Why the hell'd you keep your money — Kevin, you’re a smart guy. Why did you keep your money there if it was run by idiots?" he asked.
"It's one of many, many banks I keep my money in," O'Leary responded. "And look, I'm a big boy. And my whole point is if you have more than $250,000 in any institution, you're basically a hedge fund or a savvy investor or a business. You understand your risk and you act accordingly."
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The larger problem, according to O'Leary, is the government's decision to guarantee deposits beyond the FDIC's $250,000 maximum. He warned the significant policy change could nationalize the banking system.
"What I see here, regardless of where you stand in politics, is a pretty bad policy," O'Leary said. "What we did — in my view, it's a personal opinion — over the weekend is to nationalize the American banking system.
"We basically told everybody around the world that regardless of who you are or what bank you're in, no matter how much you have, we guarantee it. We don't care who you are or why it's there, but no matter what happens, it's guaranteed," he said.
The policy, O'Leary explained, means bankers can now abuse depositors' money with poor financial decisions without repercussions because the taxpayers, thanks to the federal government, will guarantee the deposits.
"This is a very bad mistake," O'Leary said.
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