billionaire investor bill ackman said friday that bank of america bac will buy signature bank sbny on monday as bigger systemic banks continue in their efforts to rescue distressed smaller banks the ceo of pershing square capital management has recently campaigned for an unlimited systemwide guarantee on deposits in contrast to treasury secretary janet yellen who reaffirmed the 250000 insurance cap this week until a full deposit insurance is achieved the cost of capital for smaller banks will rise forcing them to merge or be bought by bigger institutions in ackmans view “i am hearing that bank of america is going to buy signature bank on monday unless and until we can protect uninsured deposits the cost of capital is going to rise for smaller banks pushing them to merge or be acquired by the sibs i don’t think this is good for america” ackman wrote on twitter benzinga has contacted bank of america for comment on ackmans remarks read next elon musk reacts as bill ackman flags first republics risk spreading to largest banks astounding goldman sachs analyst remains optimistic the hedge fund manager also said twitter that first republic bank frcs default risk is now being spread to our largest banks” and added that “spreading the risk of financial contagion to achieve a false sense of confidence in frb is bad policy” bank of america participated in the consortium of large banks injecting a total of 30 billion into first republic bank this week ackman downplayed the efficacy of the 30billion capital infusion into frb and stated that half measures dont work when there is a crisis of confidence according to goldman sachs equity analyst ryan nash the plan to inject capital into frb will allow the firm to manage shortterm deposit withdrawals in an orderly fashion although earnings will likely be negatively impacted bank of america bac citigroup c jp morgan chase  co jpm and wells fargo wfc were the main contributors to the frc deposit injection each providing 5 billion goldman sachs gs and morgan stanley ms each contributed 25 billion while bank of new york mellon corp bk state street corp stt pnc financial services group inc pnc truist financial corp tfc and ubs group ag ubs each chipped 1 billion each bank provided 3 of its tangible common equity tce nash said in the note banking stocks continue selloff friday was another bloodbath for banking stocks frc plunged 32 wfc fell 4 bac was down 38 jpm fell 37 ms lost 34 gs tumbled 33 and c retreated by 3 the financial select sector spdr fund xlf lost 3 on friday underperforming versus all other sectors and hitting the lowest level since midoctober 2022 the spdr sp regional banking etf nyse kre fell 6 on friday and has now shed 30 of its value in the last two weeks kre is trading at levels not seen since the covid19 vaccine was discovered in november 2020