Buffett has a long history of stepping in to aid banks in crisis, leveraging his cult investing status and financial heft to restore 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. Buffett also tossed a US$5 billion ($6.71 billion) lifeline to Goldman Sachs Group Inc. in 2008 to shore up the bank following Lehman Brothers Holdings Inc.’s collapse.
Representatives for Berkshire Hathaway and the White House didn’t immediately respond to requests for comment. Officials at the US Treasury Department declined to comment.
US regulators unveiled extraordinary measures to assuage customers last weekend, promising to fully pay out uninsured deposits in the failed banks. Shares in regional banks continued to fall this week on fears the pain would spread.
Biden’s team, wary of political blowback, has moved to orchestrate backstops that don’t require direct government spending from taxpayers, including the Federal Reserve’s actions. Big US banks voluntarily deposited US$30 billion to stabilise First Republic Bank this week, a move regulators described as “most welcome.” Any investment or intervention from Buffett or other figures would continue that playbook, looking to stem the crisis without direct bailouts.
