Investor and "Shark Tank" star Kevin O'Leary condemned President Joe Biden's response to the Silicon Valley Bank (SVB) collapse, claiming Biden had eliminated risk from the industry by using taxpayers' dollars to reimburse wealthy clients.
"I don't think he'll say it in the way I'm suggesting, but what effectively happened over the weekend is that he nationalized the American banking system," O'Leary told CNN on Monday. "It's no longer a risk, it's no longer private in any sense. It is now backstopped by the government, ultimately, the taxpayer. So, it doesn't matter how bad you are as a bank manager."
O'Leary blamed the SVP collapse on a "negligent" board of directors as well as "idiotic" management," noting the two errors acted as a "powerful cocktail" to wipe out the bank.
"We knew before the weekend started, with every account, with $250,000 or less was insured, and anything beyond it was not, but that's all changed. Now you have no risk in any bank, any time, and you as the taxpayer bear that going forward," he added.
During a Friday appearance on "Your World with Neil Cavuto," O'Leary called the collapse an "absolute mess" and warned that this is an essential lesson for every company, not just start-ups and the venture community.
O'Leary said he told all of his portfolio companies that he does not want to see more than 20% of any liquid assets in any one institution.
Federal regulators on Sunday said New York-based Signature Bank was being shut down to protect consumers and the financial system following the collapse SVB.
The announcement came in a joint statement from the U.S. Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corporation. The regulators said SVB clients will have access to their money starting Monday, at no expense to the American taxpayer.
A similar program, they said, was being enacted for Signature Bank, which was closed Sunday by its state chartering authority.
"All depositors of this institution will be made whole," the joint statement read. "As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer."
FOX Business' Bradford Betz contributed to this report.
