Mark Cuban: It is suggested that the Federal Reserve should immediately purchase all securities and debts owned by banks at a price close to the face value

According to reports, Mark Cuban, the boss of the NBA Dallas Lonely Rangers and the crypto investor, sent a paper on social media to analyze the Silicon Valley Bank incident. He said that the US FDIC’s insurance deposit compensation of US $250000 was too low, and the regulatory agency had never supervised and warned that the bankruptcy of the Silicon Valley Bank would cause many companies to be unable to pay wages. Mark Cuban suggested that the Federal Reserve should immediately purchase all the securities/liabilities owned by banks at a price close to the face value, and these assets should be sufficient to pay most of the deposits. If the Federal Reserve does not do so, people’s trust in the banking system will become a problem. Many banks have more than 50% of the uninsured deposits. This is not a bailout. The Federal Reserve is actually providing cash to end the run. In return, it will obtain long-term assets that will be paid at maturity. For risky assets, it should also provide some positive returns. Previously, Mark Cuban also solemnly stated that his personal capital in Silicon Valley Bank was 0, but his portfolio was basically exposed to $8-10 million in Silicon Valley Bank.

Interpretation of this information:

Mark Cuban, the owner of the NBA’s Dallas Mavericks and a prominent crypto investor, has spoken out about the recent Silicon Valley Bank incident, arguing that the US Federal Deposit Insurance Corporation’s insurance deposit compensation of $250,000 is too low. Cuban also criticized the lack of regulatory oversight, warning that the bank’s bankruptcy will have dire consequences for many companies and their employees. In response, he proposed that the Federal Reserve should purchase all securities and liabilities owned by banks at a price close to their face value, arguing that this will ensure that enough assets are available to pay most of the deposits. Cuban argues that this is not a bailout, but rather a cash injection to stop a run on the banks. He believes that if the Federal Reserve fails to act, people’s trust in the banking system will be undermined. It is worth noting that Cuban has stated that his personal capital in the Silicon Valley Bank was $0, but his portfolio was exposed to around $8-10 million in the institution.