HomeU.S.BankWarren Buffet in contact with Biden team on banking crisis

Warren Buffet in contact with Biden team on banking crisis

Warren Buffett, CEO of Berkshire Hathaway Inc., has been in contact with key officials in President Joe Biden’s administration in recent days as the regional banking crisis deepens.

According to persons familiar with the subject who requested not to be named because the information is confidential, there have been many talks between Biden’s team and Buffett in the last week. The discussions have concentrated on Buffett perhaps investing in the US regional banking industry in some form, but the billionaire has also provided advice and guidance on the present turbulence more broadly.

Buffett has a long history of stepping in to assist distressed banks, leveraging his cult investing reputation and financial clout to restore trust in failing institutions.Bank of America Corp. received a capital infusion from Buffett in 2011 when its shares plummeted due to subprime mortgage losses. Buffett also threw a $5 billion lifeline to Goldman Sachs Group Inc. in 2008, after the bankruptcy of Lehman Brothers Holdings Inc.

Berkshire Hathaway and White House representatives did not immediately reply to calls for comment. US Treasury Department officials refused to comment.

This weekend, US authorities announced unprecedented efforts to reassure clients, pledging to completely pay back uninsured savings at collapsed banks. Regional bank shares fell further this week on worries that the suffering will spread.

Fearing political repercussions, Biden’s team has sought to create backstops that do not need direct government expenditure from taxpayers, such as the Federal Reserve’s activities. Last week, large US banks voluntarily deposited $30 billion to help strengthen First Republic Bank, a move that authorities praised as “very welcome.” Any investment or involvement from Buffett or other figures would follow that strategy, attempting to avert the crisis without resorting to outright bailouts.

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