Wednesday, May 29, 2024
HomeBusiness and FinanceWarren Buffett says we're not through with bank failures

Warren Buffett says we’re not through with bank failures


Warren Buffett on banking crisis fallout: We're not through with bank failures

Investing legend Warren Buffett believes there could be more bank failures down the road, but depositors should not ever be worried.

“We’re not over bank failures, but depositors haven’t had a crisis,” the Berkshire Hathaway chairman and CEO told CNBC’s Becky Quick on “Squawk Box” Wednesday from Tokyo. “Banks go bust. But depositors aren’t going to be hurt.”

The collapses of Silicon Valley Bank and Signature Bank last month — the second- and third-largest bank failures in U.S. history, respectively — prompted extraordinary rescue action from regulators, who backstopped all deposits in the failed lenders and provided an additional funding facility for troubled banks.

The “Oracle of Omaha” said some of the “dumb” things that banks do periodically became uncovered during this period, including having mismatched assets and liabilities as well as questionable accounting.

“Bankers have been tempted to do that forever,” Buffett said. “Accounting procedures have driven some bankers to do some things that have helped their current earnings a little bit and caused the recurring temptation to get a little bit bigger spread on record, a little more than earnings.”

Warren Buffett at a press conference during the Berkshire Hathaway Shareholders Meeting on April 30, 2022.

CNBC

Buffett said that some bankers will continue this behavior and that will put the shareholders in some of the stocks at risk.

But the 92-year-old investor said there was unnecessary fear and panic about depositors losing their money, when the system is set up to protect the entire nation’s deposits.

“The costs of the [Federal Deposit Insurance Corp.] are borne by the banks. Banks have never cost the federal government a dime. The public doesn’t understand that,” said Buffett. “Nobody is going to lose money on a deposit in a U.S. bank. It’s not going to happen … you don’t need to turn a dumb decision by managers into a panicking the whole citizenry of the United States about something they don’t need to be panicked about.”

He stressed that it’s crucial that banks retain the confidence of the public and they can lose that confidence in seconds, as highlighted in the recent blowup.

Buffett has been a white knight for troubled banks in the past. He famously came to Goldman Sachs‘ rescue with a $5 billion cash infusion after the collapse of Lehman Brothers in 2008. In 2011, Buffett injected $5 billion into then-beleaguered Bank of America in a major show of faith.

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments

love, chunibyo & other delusions hentai sexhentai.org hentai vagina porn comics henti hentaisharing.net condessa hentai kanami rance hentaihardcore.net fantina hentai نيكامهات eroplaytube.com الكس الابيض افلام جنسيه مصري realpornmovies.net سكس في الفرح
new sexy bf download pornview.org mallu aunty bathing videos مييرا هيلز pornoarabsex.com افلام سكس عائلي mayaratixxx.com pornmovstube.net www.ponr.com منى فاروق كامل 24pornload.com افلام سكس امريكاني افلام الديوث luksporno.net افلام سكس كرتون مترجم
girl sexy alohaporn.net bangla sex hd video download redtube mom and son pornbitter.com xxx lokel tamilnadu xvideo indian-porn-movies.net pornorc chloe grace moretz hot sexindiantube.net free indian sex mobi بقثثسثء arabicpornmovies.com سكس بوس واحضان