The 'mother of all moral hazards': economist Nouriel Roubini cheers the demise of banks with ties to the crypto industry
- Economist Nouriel Roubini isn't mourning the flurry of bank failures in the last week.
- In a series of tweets, he described the government's decision to backstop losses for depositors of Signature as "sickening."
There's at least one pundit who won't be losing any sleep over the biggest bank failure since the 2008 financial crisis.
Silicon Valley Bank, Silvergate, and Signature have all closed in quick succession, with the cryptocurrency industry facing the loss of three of its most important banking partners.
As crypto's biggest banking institutions collapse, Roubini ratcheted up his often fiery commentary with a simple message: "Good riddance."
The three firms had deep ties to the crypto sector. SVB held $3.3 billion in cash reserves for stablecoin issuer Circle, while Coinbase was holding $240 million in cash at Signature. Silvergate has serviced major exchanges like Kraken and Coinbase, allowing them to turn to cash in real-time.
In an series of tweets on Monday, Roubini cheered the demise of the crypto-friendly banks.
—Nouriel Roubini (@Nouriel) March 13, 2023
"Mother of [all] moral hazards. Rewarding scammers, crooks, human traffickers, criminals & con men."
The "Dr Doom" economist has long been bearish on digital assets. Earlier this year, he said "literally 99% of crypto is a scam" and a "total real-bubble Ponzi scheme that is going bust."
Roubini added that the government's decision to backstop losses for depositors of Signature Bank is just "sickening."
"What is the logic of protecting the depositors of Signature Bank, a bank that recklessly decided to jump into the crappy crypto cesspool & bet the house on shitcoins biz?" Roubini, one of the economists to call the 2008 recession, wrote.
"You have to stay away [from crypto], you have to absolutely stay away," Roubini told Yahoo Finance Live at the World Economic Forum in Davos, Switzerland.
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