Warren Buffett in Contact With Biden Team on Banking Crisis



New You can now listen to Insurance Journal articles!

Berkshire Hathaway Inc.’s Warren Buffett has been in touch with senior officials in President Joe Biden’s administration in recent days as the regional banking crisis unfolds.

There have been multiple conversations between Biden’s team and Buffett in the past week, according to people familiar with the matter, who asked not to be identified because the information is private. The calls have centered around Buffett possibly investing in the US regional banking sector in some way, but the billionaire has also given advice and guidance more broadly about the current turmoil.

Buffett has a long history of stepping in to aid banks in crisis, leveraging his cult investing status and financial heft to restore confidence in ailing firms. Bank of America Corp. won a capital injection from Buffett in 2011 after its stock plunged amid losses tied to subprime mortgages. Buffett also tossed a $5 billion lifeline to Goldman Sachs Group Inc. in 2008 to shore up the bank following Lehman Brothers Holdings Inc.’s collapse.

Representatives for Berkshire Hathaway and the White House didn’t immediately respond to requests for comment. Officials at the US Treasury Department declined to comment.

US regulators unveiled extraordinary measures to assuage customers last weekend, promising to fully pay out uninsured deposits in the failed banks. Shares in regional banks continued to fall this week on fears the pain would spread.

Biden’s team, wary of political blowback, has moved to orchestrate backstops that don’t require direct government spending from taxpayers, including the Federal Reserve’s actions. Big US banks voluntarily deposited $30 billion to stabilize First Republic Bank this week, a move regulators described as “most welcome.” Any investment or intervention from Buffett or other figures would continue that playbook, looking to stem the crisis without direct bailouts.

Photo: Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc.(Bloomberg)

Copyright 2023 Bloomberg.

Was this article valuable?


Here are more articles you may enjoy.

The most important insurance news,in your inbox every business day.

Get the insurance industry’s trusted newsletter



Source link