Republican presidential candidate and biotech mogul Vivek Ramaswamy said Sunday that if he were president, he would not bail out Silicon Valley Bank or its depositors.
"I would not bail out either SVB or even the depositors because here's what's actually going on. SVB made some — Silicon Valley Bank made some uniquely bad management decisions," Ramaswamy told host Kaitlin Collins on CNN’s State of the Union.
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Ramaswamy said "many" Silicon Valley executives have reached out to him this weekend to "push the narrative" of a "bank run in America" if this bank doesn't get "bailed out."
"First of all, they have a depositor base that's really concentrated of tech start-ups in Silicon Valley. A staggering nearly 90 percent of their deposits are uninsured. That's an anomaly compared to most banks in this country," he told CNN on Sunday.
He continued, "So what's happening right now is, a lot of Silicon Valley executives and V.C.s this weekend, many of them have even reached out to me to push this narrative that that's going to create a bank run in America if Silicon Valley Bank isn't actually bailed out. But what they're doing is actually trying to create the fear of one. I think that can actually become a self-fulfilling prophecy, which is dangerous."
The 37-year-old multi-millionaire, who runs his own financial firm Strive Asset Management, examined why Silicon Valley Bank was different than normal banks.
"The reality is Silicon Valley Bank also had exposure to interest rate-tethered securities that they could have hedged. A normal bank would have done that. Silicon Valley Bank did not. So I do not think we should reward that kind of bad behavior, that kind of bad mismanagement. And even on behalf of many start-up companies who put their money in a concentrated way into that one bank, I don't think we should be rewarding that with a bailout, " he said.
Tech sector entrepreneurs encouraged politicians to "let the market work here" and to "let Silicon Valley Bank fail, if needed."
Biden's Treasury Secretary Janet Yellen rejected the idea of bailing out Silicon Valley Bank like the government did in the 2008 financial crisis during an interview with CBS’ “Face the Nation.”
"We’re not going to do that again,” she said on Sunday.
Yellen added, “We are concerned about depositors and are focused on trying to meet their needs.”
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Depositors at Silicon Valley Bank, the nation’s 16th-largest bank, could reportedly now get back as little as 30% of their money. The collapse of the bank has had a ripping effect across the tech industry.
"The government needs to do one thing," he said. "It's get out of the way if another bank actually wants to acquire Silicon Valley Bank. There's a lot of credible rumors this weekend that, actually, the FDIC or other parts of the government are going to obstruct an acquisition because they don't want more concentration risks in other banks. No, I think the government needs to get out of the way."