Warren Buffett is in contact with Biden officials about the 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 contact between Buffett and the administration was described by people familiar with the matter, who asked not to be identified when discussing personal information. It was not immediately clear what role the billionaire investor might play in containing the crisis following the failure of Silicon Valley Bank, Signature Bank and Silvergate Capital Corporation.

Buffett has a long history of helping banks in crisis, using his cult investor status and financial contributions to restore confidence in troubled companies. Bank of America Corp. won a capital investment from Buffett in 2011 after its stock collapsed amid losses related to 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 for Berkshire Hathaway and the White House did not immediately respond to requests for comment. U.S. Treasury officials declined to comment.

Last weekend, US regulators announced extraordinary measures to reassure customers, promising to pay fully uninsured deposits at failed banks. Shares of regional banks continued to fall this week, fearing the pain would spread.

Wary of political backlash, Biden’s team has moved to organize backstops that don’t require direct government spending from taxpayers, including actions by the Federal Reserve. Major U.S. banks voluntarily deposited $30 billion to stabilize First Republic Bank this week, in what regulators described as a “welcome move.” Any investment or intervention by Buffett or other individuals would continue this playbook and seek to stop the crisis without direct bailouts.

— with assistance from Max Reyes and Katherine Doherty.

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