Warren Buffett on Saturday said Berkshire Hathaway is cautious around the banking sector, largely because of poor messaging by officials around government-insured deposits, as well as distorted incentives he said were brought on by banking regulation.
is cautious around the banking sector, largely because of poor messaging by officials around government-insured deposits, as well as distorted incentives he said were brought on by banking regulation.
"The U.S. government and the American public have no interest in having a bank fail and having deposits actually lost by people," he said. While 89% of SVB's $175 billion in deposits were uninsured as of the end of 2022, according to the FDIC, depositors were protected, even those whose accounts exceeded $250,000, through a "systemic risk exception" designed to prevent broader contagion to the U.S. banking system."We want to be there if the banking system temporarily even gets stalled in some way - it shouldn’t - I don’t think it will, but I think it could," he said.
Buffett made the comments while sitting behind a sign that said "Available for sale," while his longtime business partner, Charlie Munger, sat behind a "Held-to-maturity" sign, referencing how banks account for their securities, which has been at the heart of the regional bank crisis.
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