Warren Buffett in touch with Biden officials on banking crisis

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(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 crisis unfolded.

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Contacts between Buffett and the administration were described by people familiar with the matter, who asked not to be identified discussing private information. It was not immediately clear what role the billionaire might play in averting the crisis following the failures of Silicon Valley Bank, Signature Bank and Silvergate Capital Corp.

Buffett has a long history of using his cult status and financial clout to rescue in crisis, restoring confidence in ailing firms. Bank of America Corp won a capital injection from Buffett in 2011 after its stock plunged amid losses tied to subprime mortgages. Lehman Brothers Holdings Inc. Buffett founded Goldman Sachs Group Inc. in 2008 to shore up the bank after its collapse. Also gave a lifeline of $5 billion to

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

US regulators last weekend unveiled extraordinary measures to reassure customers, promising to fully pay back uninsured deposits held at failed banks. Shares of regional banks continued to slide this week on fears that the pain would spread.

Biden's team, wary of setbacks, has moved to orchestrate backstops that do not require direct government spending from taxpayers, including actions by the Federal Reserve. Large US banks voluntarily deposited $30 billion this week to stabilize First Republic Bank, a move regulators described as “most welcome”. Any investment or intervention from Buffett or other figures would continue that playbook, which seeks to head off the crisis without a direct bailout.

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– With assistance from Max Reyes.

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