Kevin O'Leary Thinks Small Lenders' Days Are Numbered Now: 'Don't Want To Pay For Every Idiot Banker's Mistakes'

"Shark Tank" investor Kevin O’Leary,  a businessman and investor, has offered his take on the banking crisis following Federal Reserce Governor Micahel Barr’s  Congressional testimony that the central bank is looking to enforce stricter regulations for regional banks.

What’s In Store For Regional Banks:  O’Leary came down hard on bank executives and said, “When you have top lawmakers call you worst of the worst of the worst, it just doesn’t get any worse."

"It has been worse for a consumer who has a deposit of over $250,000 in a small bank somewhere in the U.S., watching all these play out in Washington and all the grandstand hearings," O’Leary said in an interview with CNN.

“This is the beginning of the demise of small banks for sure and we are going to end up with an oligopoly of very large institutions with the imputed concept that they are backed by the federal government."

He also made it clear that he did not favor bailouts. “I do not want to pay for every idiot banker’s mistakes,” he said. "And there are many idiot bankers.”

See Also: Best Financial Services Banks Right Now

Self-Created Problems:  O’Leary noted that banks were incompetent and questioned why everyone should own that problem.

“I don’t care what they do in California,” he said, referring to the problems with the now-defunct Silicon Valley Bank.  SVB, which had several tech startups and venture capital firms among its customer base, collapsed after run-ins in the wake of balance sheet issues.

The problems at SVB stemmed from asset maturity mismatch due to a fall in the long-term Treasuries it held in its balance sheet amid the rise in the Fed funds rate.

O'Leary said every taxpayer in the U.S. should be asking if they would want to guarantee every tiny bank in America.

He also said Treasury Secretary Janet Yellen, after committing to insuring every deposit in the U.S. banks, was back-pedaling due to pressure.

"The emotional tie attached to regional banks in the past and the purpose of their existence are no longer a reality now," O’Leary said. "Now, it’s all done online and you don’t need that building."

“But if you really feel the need to have a regional bank and you feel as a governor or senator of your state ... then, you should own the risk,” he added.

"Would you personally guarantee the bank in New Jersey or New York? Would you personally go on the hook because you want to have a regional bank in these states?"

O’Leary clarified that he won’t touch bank stocks. “I’m never going to buy bank stocks. It’s over.”

Read Next: Bill Ackman Warns Of Accelerating Deposit Outflows After Janet Yellen's Backtrack: 'Big Mistake'