“We have gone from implicit support for depositors to [Secretary Yellen’s] explicit statement today that no guarantee is being considered,” the founder of Pershing Square Capital Management tweeted on Wednesday. Ackman continued that he “would be surprised if deposit outflows don’t accelerate effective immediately.”

Ackman backed “a temporary systemwide deposit guarantee,” which he said would “stop the bleeding.” (Ackman claimed on Twitter that he has “no positions long or short in any banks”).

Secretary Yellen said in a Senate hearing on Wednesday that the administration had not “considered or discussed anything having to do with blanket insurance or guarantees of deposits,” though she suggested that Congress should consider changes to federal deposit insurance.

Yellen’s testimony was a contrast to her comments a day earlier to the American Bankers Association, where she said that more interventions, like what the Federal Reserve did to protect depositors at Silicon Valley Bank, “could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”

More government action

Ackman has loudly called for stronger and more expansive government action since worries about banks started earlier this month. The hedge fund founder called for a government bailout of Silicon Valley Bank when it suffered a run on its deposits in early March. 

On March 12, U.S. regulators announced they would protect depositors at Silicon Valley Bank and Signature Bank of New York, which failed a few days after SVB, in full, citing a “systemic risk exception.”

(Ackman praised the decision on Twitter soon after, saying it “sent a message that depositors can trust the banking system.”)

Both banks and lawmakers are calling for expanded deposit protections to restore confidence in the banking sector. Normally, deposits are only protected up to the first $250,000. 

Over the weekend, the Mid-Size Bank Coalition of America, an association of smaller banks, asked regulators to insure all deposits for the next two years, reports Bloomberg. 

First Republic 

Eyes are now on First Republic Bank, whose shares fell 15.5% on Wednesday, following Yellen’s comments. They’ve fallen 89.2% in the past month. 

Eleven major banks deposited $30 billion into First Republic Bank last week, in order to give the struggling lender enough liquidity to find a solution.

Yet the move failed to reassure shareholders and customers, and now negotiations—reportedly led by JPMorgan CEO Jamie Dimon—are ongoing to find other solutions, like a direct investment into the bank.

Any deal may require government backing to encourage other banks to save First Republic Bank, reports Bloomberg. 

Ackman was not a fan of the $30 billion deposit in First Republic Bank, calling it “bad policy” that risked spreading financial contagion to present a “false sense of confidence.”