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19 Mar, 2023 07:53

Washington seeks banking crisis advice from Warren Buffet – Bloomberg

Talks reportedly touched on the 'Oracle of Omaha's' possible investment in the banking sector
Washington seeks banking crisis advice from Warren Buffet – Bloomberg

Senior US officials have been in talks with billionaire investor Warren Buffet on the unfolding banking crisis and possible ways out of it, Bloomberg reported on Sunday, citing sources within President Joe Biden’s administration.

Known as the 'Oracle of Omaha', Buffett is one of the globe’s most successful investors with a fortune worth roughly $101.6 billion. He is head of the Berkshire Hathaway conglomerate, which owns dozens of successful companies, including insurer Geico, battery maker Duracell and restaurant chain Dairy Queen.

The alleged talks between the billionaire and Washington officials took place over the past week and reportedly focused on possible investment by Buffet in the banking sector and his advice regarding the volatile situation in the industry.

Officials turned to the tycoon following the collapse of three US regional lenders earlier this month – Silvergate, Silicon Valley Bank (SVB) and Signature – following mass deposit outflows. The bank runs were triggered by investor worries over the financial health of the institutions following recent interest rate hikes.

The fallout has shaken the entire US banking industry, with dozens of other lenders seeing their stocks plunge despite extraordinary measures announced by regulators last week to assuage customers. Nearly 200 US banks currently face risks similar to those that led to the collapses, according to a study posted this week to the Social Science Research Network.

Buffett has aided banks before. He invested $5 billion in Goldman Sachs following the financial crisis of 2008 and the collapse of Lehman Brothers Holdings. Bank of America secured a capital injection from the billionaire in 2011 when its stock fell due to losses from subprime mortgages.

For more stories on economy & finance visit RT's business section

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