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© 2026 Benzinga | All Rights Reserved
March 18, 2023 10:47 AM 1 min read

Elon Musk Spells Out Two-Step Solution For Banking Crisis, As Y Combinator's Co-founder Highlights 'Terrifyingly Fragile' Condition Of Banks

by Shanthi Rexaline Benzinga Editor
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$422.99-1.72%
Overview

As the banking crisis continues to play out, both experts and entrepreneurs are deliberating on a potential solution that can prevent any further fallout.

What Happened: On Saturday, Paul Graham, co-founder of technology startup accelerator Y Combinator, tweeted a Washington Post story, which noted that if banks were forced to liquidate their bond and loan portfolios suddenly, the losses they may have to incur will likely erase between 77-91% of their combined capital infusion. "[Large] numbers of banks are terrifying fragile," the report said.

Read Also: Best Financial Services Stocks Right Now

In response, Elon Musk, CEO of Tesla (NASDAQ:TSLA), offered a two-pronged solution for the crisis at hand.

The Federal Deposit Insurance Corporation, or FDIC, should offer “unlimited coverage” to stop bank runs, the billionaire entrepreneur suggested. He also added that the Treasury should stop issuing “ridiculously” high-yield bills such that it makes no sense to have money in low-interest rate savings accounts.

Read Next: Elon Musk Reacts As Bill Ackman Flags First Republic's Risk Spreading To Largest Banks: '...Astounding'

Photo: Shutterstock

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© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.


Posted In:
Analyst ColorNewsEconomicsElon Musk

Why It’s Important: The Fed’s aggressive rate hikes have pushed up bond yields, reducing the value of Treasury bonds held by banks. When Silicon Valley Bank (NASDAQ:SIVB) disclosed the erosion of its portfolio’s value and the need for additional financing to make up for the shortfall, nervous depositors — primarily venture capital firms and tech startups — began a bank run.

TSLA Logo
TSLATesla Inc
$422.99-1.72%
Overview
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