Warren Buffett in contact with the Biden team on the banking crisis

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

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According to people familiar with the matter, there have been several conversations between Biden’s team and Buffett over the past week, asking not to be identified because the information is private. The calls focused on Buffett potentially investing in the regional US banking sector in some way, but the billionaire has also offered more general advice and guidance on the current turmoil.

Buffett has long stepped in to help banks through crises, using his status as a cult investor and financial clout to restore confidence in struggling companies. The Bank of America Corp. received a capital injection from Buffett in 2011 after its stock plummeted on losses related to subprime mortgages. Buffett also tossed Goldman Sachs Group Inc. a $5 billion lifeline in 2008 to prop up the bank following the collapse of Lehman Brothers Holdings Inc.

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

US regulators last weekend unveiled extraordinary measures to reassure customers, pledging to fully pay out uninsured deposits in the failed banks. Regional bank shares fell further this week on fears the pain would spread.

Biden’s team, fearing policy backlash, has moved to orchestrating backstops that don’t require direct government spending from taxpayers, including Federal Reserve measures. Major U.S. banks this week voluntarily pledged $30 billion to stabilize First Republic Bank, a move regulators described as “highly welcome.” Any investment or intervention by Buffett or other figures would continue this playbook, attempting to contain the crisis without outright bailouts.

The story goes on

–Assisted by Max Reyes and Katherine Doherty.

(Updates with details on conversations in second paragraph.)

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