Warren Buffett is in touch with Team Biden about the banking crisis

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

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There have been multiple conversations between the Biden team and Buffett in the past week, according to people familiar with the matter, who asked not to be identified because the information is private. Calls have centered around Buffett potentially investing in the US regional banking sector in some way, but the billionaire has also offered advice and advice on a broader scale about the current turmoil.

Buffett has a long history of stepping in to help banks in crisis, leveraging his sectarian investment status and financial heft to restore confidence in ailing companies. Bank of America Corp. won a capital injection from Buffett in 2011 after its shares plunged amid losses linked to subprime mortgages. Buffett also threw a $5 billion lifeline to Goldman Sachs Group Inc. In 2008 to support the bank in the aftermath of the collapse of Lehman Brothers Holdings Inc.

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

US regulators unveiled extraordinary measures to appease customers last weekend, promising to pay uninsured deposits in failing banks in full. Shares in regional banks continued to fall this week on fears of spreading pain.

The Biden team, apprehensive about political setbacks, has moved to coordinate pauses that don’t require direct government spending from taxpayers, including Fed actions. Major US banks voluntarily deposited $30 billion to stabilize the First Republic Bank this week, a move regulators called “very welcome.” Any investment or intervention from Buffett or other figures will continue in this playbook, looking to stem the crisis without outright bailouts.

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— with assistance from Max Rees and Kathryn Doherty.

(Updates with details of the conversations in the second paragraph.)

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