(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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Buffett’s contact with the administration was described by people familiar with the case, who asked not to be identified when discussing private information. It was not immediately clear what role the billionaire investor could play in containing the crisis after the failures of Silicon Valley Bank, Signature Bank and Silvergate Capital Corp.
Buffett has a long history of stepping in to help banks in crisis, using his cult investment status and financial weight to restore confidence in ailing companies. Bank of America Corp. won a capital injection from Buffett in 2011 after his stock plummeted amid losses on subprime mortgages. Buffett also threw a $5 billion lifeline to Goldman Sachs Group Inc in 2008. to prop up the bank after the collapse of Lehman Brothers Holdings Inc.
Representatives from Berkshire Hathaway and the White House did not immediately respond to requests for comment. U.S. Treasury Department officials declined to comment.
Over the weekend, US regulators unveiled extraordinary measures to reassure customers and pledged to pay out uninsured deposits in failed banks in full. Shares in regional banks continued to fall this week on fears the pain would spread.
Biden’s team, wary of political backlash, has moved to orchestrate backstops that do not require direct government spending from the taxpayer, including the actions of the Federal Reserve. Major U.S. banks this week volunteered $30 billion to stabilize First Republic Bank, a move regulators described as “very welcome.” Any investment or intervention from Buffett or other figures would continue that playbook, hoping to stop the crisis without immediate bailouts.
–With help from Max Reyes and Katherine Doherty.
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