BLOOMBERG Warren Buffett, the billionaire investor in Berkshire Hathaway (BRK/A), has been in touch with senior officials in President Joe Biden’s administration in recent days as the regional banking crisis unfolded.
According to people familiar with the matter, who asked not to be named because the information is private, there have been multiple calls between the Biden and Buffett team over the past week.
The calls centered on Buffett, who may be investing in America’s regional banking sector in some way, but the billionaire has also offered broader advice and guidance on the current turmoil.
Buffett has a long history of stepping in to help banks during crises, using his status as a cult investor and financial clout to restore confidence in struggling companies. One of his mantras is “Never bet against America,” alluding to the strength of the American economy.
Bank of America (BAC) received a capital injection from Buffett in 2011 after its shares plummeted on losses related to subprime mortgages. Buffett also launched a $5 billion lifeline for Goldman Sachs (GS) in 2008 to prop up the bank following the collapse of Lehman Brothers.
Berkshire Hathaway and White House officials did not immediately respond to requests for comment. US Treasury Department officials declined to comment.
US regulators last weekend unveiled extraordinary measures to reassure customers, pledging to fully repay uninsured deposits at banks that have failed in this case Silicon Valley Bank and Signature Bank. Regional bank shares fell further last week on fears that losses would spread.
Biden’s team, fearing political backlash, has moved to orchestrating safeguards that don’t require direct government spending from taxpayers, even through the Federal Reserve.
Major U.S. banks this week voluntarily pledged $30 billion to stabilize First Republic Bank, a move regulators say is “very welcome.”
Any investment or intervention by Buffett or other market figures would continue this handbook and attempt to contain the crisis without direct bailouts.
In collaboration with Max Reyes and Katherine Doherty.
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