Warren Buffett in touch with Biden officials on banking crisis

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

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The outreach 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 might play in containing the crisis following 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 strength to restore confidence in troubled companies. Bank of America Corp. won a capital injection from Buffett in 2011 after the stock slumped amid losses linked to subprime mortgages. Buffett also threw a $5 billion lifeline to Goldman Sachs Group Inc. in 2008 to support 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. U.S. Treasury officials declined to comment.

US regulators unveiled extraordinary measures to reassure customers last weekend, pledging to pay out uninsured deposits in distressed banks in full. Shares in regional banks continued to fall this week on fears that the pain would spread.

Wary of political backlash, Biden’s team has moved to orchestrate backstops that do not require direct government spending from taxpayers, including actions by the Federal Reserve. Major US banks voluntarily contributed $30 billion to stabilize First Republic Bank this week, a move regulators described as “very welcome.” Any investment or intervention by Buffett or other figures would continue this playbook and try to contain the crisis without direct bailouts.

–With assistance from Max Reyes and Katherine Doherty.

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