Warren Buffett, the CEO of Berkshire Hathaway Inc., has been in communication with senior officials in President Joe Biden’s administration in the wake of the regional banking crisis that has unfolded. According to sources familiar with the matter, there have been multiple discussions between Biden’s team and Buffett in the last week.
While the conversations have primarily focused on Buffett potentially investing in the regional banking sector, the billionaire has also provided guidance and advice on the current turmoil more broadly.
Buffett has a history of stepping in to aid banks in crisis, leveraging his investing prowess and financial strength to restore confidence in struggling firms. In 2011, Bank of America Corp received a capital injection from Buffett after its stock plummeted due to subprime mortgage losses.
Similarly, in 2008, Buffett provided a $5 billion lifeline to Goldman Sachs Group Inc to bolster the bank following Lehman Brothers Holdings Inc.’s collapse.
Representatives for Berkshire Hathaway and the White House did not respond to requests for comment, while officials at the US Treasury Department declined to provide any statement.
Warren Buffett’s potential involvement in the regional banking crisis is an ongoing matter, and further developments remain to be seen.
Last weekend, US regulators revealed extraordinary measures to calm customers down, promising to pay out all uninsured deposits in the failed banks.
However, the shares of regional banks continued to decline this week, raising concerns that the effects of the crisis would spread.
Amid the ongoing crisis, Warren Buffett of Berkshire Hathaway Inc. has been in contact with senior officials in the Biden administration, according to people familiar with the matter.
While the discussions have mainly focused on the potential for Buffett to invest in the US regional banking sector, the billionaire has also provided guidance and advice more broadly on the current turmoil.
Buffett has a history of stepping in to aid banks in crisis, leveraging his status as a cult investor and his financial strength to restore confidence in struggling companies.
Bank of America Corp. received a capital injection from Buffett in 2011 after its stock plummeted due to losses related to subprime mortgages, while he also provided a $5 billion lifeline to Goldman Sachs Group Inc. in 2008 following Lehman Brothers Holdings Inc.’s collapse.
It remains unclear whether Buffett will decide to invest in the regional banking sector or provide any other form of intervention. Nonetheless, officials at the US Treasury Department declined to comment on the situation, and representatives for Berkshire Hathaway and the White House have not responded to requests for comment.
As the Biden administration is wary of political backlash, it has moved to orchestrate backstops that do not require direct government spending from taxpayers. These measures include the Federal Reserve’s actions, and big US banks voluntarily depositing $30 billion to stabilize First Republic Bank this week, which regulators welcomed.
Any potential investment or intervention from Buffett or other figures would likely follow this playbook, attempting to contain the crisis without resorting to direct bailouts.