2023-05-08 04:17:00
American billionaire Warren Buffett considered on Saturday that the US government’s handling of the regional banking crisis was “weak,” noting that the lack of confidence among depositors is due to this matter.
Since the beginning of March, the crisis has afflicted four regional banks in the United States, three of which were later acquired by other institutions with the help of the authorities.
With regard to two banks, “Silicon Valley” and “Signature”, the Federal Deposit Insurance Corporation has taken a controversial decision to support uninsured deposits in them to ward off infection that might affect other banks. By law, the foundation only secures up to a $250,000 deposit in eligible banks.
Despite this unusual move, concern remained for deposit holders, as Buffett said during the annual meeting of shareholders of his “Berkshire Hathaway” group. He added, “He has been weakened by politicians who sometimes have an interest in him being so, and weakened by government agencies. I would say he has been weakened by the press.” He explained that what happened with “Silicon Valley” showed a government takeover that was followed by an expanded guarantee of deposits, but people were still “confused”.
Although the emergency takeover of First Republic by JPMorgan Chase on Monday seemed to ease anxiety regarding the crisis, it was a turbulent week. Many medium-sized banks on Wall Street were hit by tremors, especially Pac-West, whose stock fell by 68 percent before recovering by 82 percent in Friday trading.
On Saturday, Berkshire Hathaway Group announced huge profits of $35.5 billion in the first quarter alone, due to the strong performance of the financial markets.
Buffett transformed Berkshire Hathaway from a small textile company he bought in the mid-1960s into a giant conglomerate now valued at more than $700 billion.
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