Home / News / World /  Ahead of Fed meet, Warren Buffett talks with Biden officials on banking crisis

American business magnate Warren Buffett is in touch with senior officials of Joe Biden's administration as the banking crisis unfolds in the country.

The outreach between Buffett and the Biden administration was reported by the Bloomberg news agency.

The CEO of Berkshire Hathaway Inc may play to contain the crisis after the failures of Silicon Valley Bank, Signature Bank, and Silvergate Capital Corp.

Warren 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 the crumbling banking system.

For instance, Bank of America Corp. won a capital injection from Buffett in 2011 after its stock plunged due to losses tied to subprime mortgages. Buffett also threw a $5 billion lifeline to Goldman Sachs Group Inc in the 2008 financial crisis to shore up the bank following Lehman Brothers Holdings Inc.’s collapse.

Recently, the US regulators unveiled extraordinary measures to assuage customers after the collapse of Silicon Valley Bank and Signature Bank this month promising to fully pay out uninsured deposits in the failed banks.

The Federal Reserve also made it easier for banks to borrow from it in emergencies.

While the measures provided some relief for Silicon Valley firms and global markets on Monday, worries about broader banking risks remain and have cast doubts over whether the Fed will stick with its plan for aggressive interest rate hikes.

Many Fed watchers expect a smaller, quarter-point increase, and some say the US central bank will pause altogether after a two-day meeting that starts on Tuesday.

Before the collapse of Silicon Valley Bank and the resulting fallout, Fed policymakers were poised to raise rates by as much as 50 basis points after a string of data suggested the economy was much stronger than officials thought at the beginning of the year. However, given the volatility in the financial market, all eyes will be on the Fed meeting that will be held on 21-22 March.

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