The U.S. has reportedly turned to Warren Buffett once more for help in a financial crisis.
The billionaire investor offered lifelines to Goldman Sachs in 2008 following the collapse of Lehman Brothers, and to Bank of America in 2011.
Now, Buffett has been in contact with the White House amid this year’s regional banking crisis, offering advice and guidance but also discussing an investment in the sector, Bloomberg News reported Sunday (March 19), citing unnamed sources.
Federal officials have sought to reassure the public over the past week after two high-profile banking failures: the collapse of Silicon Valley Bank on March 10, followed by the failure of Signature Bank two days later.
In a speech March 13, President Joe Biden told Americans they “can rest assured our banking system is safe. Your deposits are safe.”
That hasn’t kept politicians from both sides of the aisle for proposing tougher action against the banking sector. In that same speech, Biden called for a “full accounting” of what led to the two bank failures.
Later in the week, the top Republican and Democrat on the House Financial Services Committee said they’d scheduled a hearing for later this month to question top officials from the Federal Reserve and Federal Deposit Insurance Corp.
“The House Financial Services Committee is committed to getting to the bottom of the failures of Silicon Valley Bank and Signature Bank,” Republican Patrick McHenry and Democrat Maxine Waters said in a news release. “This hearing will allow us to begin to understand why and how these banks failed.”
“Last weekend felt like the wild, wild West,” Charlie Youakim, CEO of payments startup Sezzle, told PYMNTS CEO Karen Webster soon after the SVB failure. “SVB had been around forever, they had a great brand. [Its collapse] is a big shock to me.
Now, he added, there’s a conversation happening across the ecosystem about the future of banking, as they begin to be more diligent about where they keep their money.
“We’ve got a board meeting later this week to go over the set of banks that [Sezzle] works with,” said Youakim. “We’re putting together a report of what these banks look like, their financial stability … because it’s not the case anymore that you can just trust your bank, trust that your money will be safe.”