Warren Buffett in touch with Biden officials on banking crisis

(Bloomberg) – Warren Buffett of Berkshire Hathaway Inc. has been in contact with senior officials in President Joe Biden’s administration in recent days as the regional banking crisis unfolds.

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The communication between Buffett and the administration was described by people familiar with the matter, who asked not to be identified discussing private information. It was not immediately clear what role, if any, the billionaire investor could play in containing the crisis following the bankruptcies of Silicon Valley Bank, Signature Bank and Silvergate Capital Corp.

Buffett has long stepped in to help banks in crisis, leveraging his cult investor status and financial clout to restore confidence in struggling companies. Bank of America Corp. won a capital injection from Buffett in 2011 after its stock plunged amid subprime mortgage losses. Buffett also threw a $5 billion lifeline at Goldman Sachs Group Inc. in 2008 to shore up the bank after the collapse of Lehman Brothers Holdings Inc.

Representatives for Berkshire Hathaway and the White House did not immediately respond to requests for comment. US Treasury Department officials declined to comment.

US regulators unveiled extraordinary measures to appease customers last weekend, promising to fully reimburse uninsured deposits at failing banks. Shares of regional banks continued to fall this week on fears the pain could spread.

Biden’s team, wary of political backlash, decided to orchestrate backstops that don’t require direct public spending from taxpayers, including Federal Reserve actions. Major U.S. banks voluntarily deposited $30 billion to stabilize First Republic Bank this week, a move regulators called “very welcome.” Any investment or intervention by Buffett or other figures would continue this playbook, seeking to stem the crisis without direct bailouts.

–With help from Max Reyes and Katherine Doherty.

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