(Bloomberg) — Warren Buffett of Berkshire Hathaway Inc. has been in touch with senior officials in President Joe Biden’s administration over the past few days as the regional banking crisis unfolded.
Most read by Bloomberg
Buffett’s contact with the administration was described by people familiar with the matter, who asked not to be identified while they discussed private information. It wasn’t immediately clear what the role of the billionaire investor would be after the collapse of Silicon Valley Bank, Signature Bank and Silvergate Capital Corp. could play in containing the crisis.
Buffett has long stepped in to help banks through crises, using his status as a cult investor and financial clout to restore confidence in struggling companies. The Bank of America Corp. received a capital injection from Buffett in 2011 after its stock plummeted on losses related to subprime mortgages. Buffett also tossed Goldman Sachs Group Inc. a $5 billion lifeline in 2008 to prop up the bank following the collapse of Lehman Brothers Holdings Inc.
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 pay out uninsured deposits in the failed banks. Regional bank shares fell further this week on fears the pain would spread.
Biden’s team, fearing policy backlash, has moved to orchestrating backstops that don’t require direct government spending from taxpayers, including Federal Reserve measures. Major U.S. banks this week voluntarily pledged $30 billion to stabilize First Republic Bank, a move regulators described as “highly welcome.” Any investment or intervention by Buffett or other figures would continue this playbook, attempting to contain the crisis without outright bailouts.
The story goes on
–Assisted by Max Reyes and Katherine Doherty.
Most Read by Bloomberg Businessweek
©2023 Bloomberg LP