Jim Cramer Warns Causing a Bank Run is ‘Easy’
CNBC’s Jim Cramer treaded lightly before the Wall Street opening bell with his commentary on what might be in store for the market Monday after the collapse of Silicon Valley Bank in California and Signature Bank in New York.
Cramer, who has come under scrutiny for hyping SVB before it failed, was on Squawk on the Street to talk about the bank run that caused its collapse. Financial observers have been concerned that the bank’s failure could spark runs on other smaller regional banks, which could send the economy into a freefall.
After suggesting that Silicon Valley Bank’s examiners should be called into question, Cramer said that “what I’m concerned about is that when you see where all these banks are trading, you may need to have more assurance than we’re getting right now.
“There are a lot of banks that truly did not have the right mix, and we’re discovering that today,” he continued. “We had a lot of balance sheet growth from 2019 to 2022, so these banks put money to work — some of them at the wrong part of the yield curve — and because they did that, they don’t have enough capital. They are really wildly underwater.”
Carl Quintanilla then asked Cramer about the possibility of the government putting a halt on the fleeing of deposits.
“It’s so easy to transfer money to the banks that are ‘not in trouble,’ that we have to deal with something which says you cannot move, period, end of story,” Cramer said. “So it’s not over. I do want to caution that if you have money in some of these banks, well, they’re obviously going to punish you. We don’t know which ones are which, obviously, and I don’t want to cause any run. It is easy for any of us to cause a run at this moment.”
Watch above via CNBS.
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