US businessman and CEO of Berkshire Hathaway Company Warren Buffett spoke to top officials of President Joe Biden’s administration about the crisis in the banking sector. A Biden team and Buffett have had multiple talks in the past week. People familiar with the matter said this on condition of anonymity.
Buffett is likely investing in the US regional banking sector. Also this billionaire gave better advice and guidance on the current mess.
The tycoon has a long history of helping any bank in trouble. His efforts to restore confidence in failing financial institutions continue.
Earlier, Buffett deposited $5 billion with Goldman Sachs Inc. in 2008 after the collapse of Lehman Brothers Holdings Inc.
Representatives for Berkshire Hathaway and the White House did not immediately respond to requests for comment. US Treasury Department officials also declined to comment.
US regulators have taken measures to reassure consumers over the past week. Banks in distress have pledged to repay uninsured deposits in full.
Biden’s team, however, is wary of political blowback. Major U.S. banks this week volunteered $30 billion to stabilize First Republic Bank. It was welcomed by the Biden administration. Buffett or others are expected to step in to overcome the crisis without an outright bailout.
On March 10, Silicon Valley Bank (SVB), America’s 16th largest lender, with assets of about $200 billion, suddenly closed due to failed attempts to raise capital and failed deposit controls. Bank authorities announced on March 8 that they will sell shares worth 2.5 billion or 2.25 billion dollars to strengthen the balance sheet. Within 48 hours, the American Federal Deposit Insurance Corporation announced its closure. Signature Bank also closed down after that. Financial turmoil also began at First Republic Bank.
When a bank goes bankrupt, panic naturally sets in and the question is which one is next? Other financial institutions reduce or withdraw from distressed banks. Investors’ morale collapsed. Depositors face losses.
Source: Bloomberg
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