(DailyDig.com) – Kevin O’Leary, the chairman of O’Leary Ventures and a “Shark Tank” investor, addressed why community banks needn’t exist. He doesn’t invest in anti-business Democrat states after the recent market crisis caused by the Silicon Valley Bank disaster contagion.
O’Leary questions why he is asked to backup an account at California’s banks, Silicon Valley or First Federal. On March 16, after the unexpected collapse of Silicon Valley Bank the previous weekend, a consortium of the US’s largest banks saved First Republic Bank by making a $30 billion investment.
JPMorgan Chase, Wells Fargo, Bank of America, and Citigroup will each deposit $5 billion. Morgan Stanley and Goldman Sachs will each invest $2.5 billion. Each of the following firms will donate $1 billion: PNC, Truist, BNY Mellon, State Street, and U.S. Bancorp.
Regional banks make little sense in the digital era, O’Leary remarked. “Why am I liable?” He maintained that California’s policies stink. They, not he, should run their bank. There will be a great deal more activity since these banks will endure a great deal of stress in competing with titans.
O’Leary stated that federal authorities should allow bankrupt banks to collapse and not prop up institutions headed by fools. The management is bad, and they should fail. It will bring instability, but the majority of nations, including Switzerland, Australia, Canada, and the United Kingdom, have experienced this for decades. These countries’ economies are controlled by a few megabanks that are strictly regulated. Since 99 percent of transactions are conducted online, we no longer need a multitude of insignificant banks.
The economics of North Dakota is of special interest to O’Leary. This year, he revealed that his company would invest $45 million of the state’s stimulus money. In 1919, they established a sovereign bank. It has experienced the fourth-fastest rise in GDP per capita. It facilitates agricultural and real estate transactions. Well-managed businesses do not fail.
Recently, O’Leary was questioned by his son, 26, about why banks had physical premises. He wondered why someone would physically visit the location. The following generation has no need for this. It is obsolete.
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