The famous stockbroker Warren Buffett is also involved in the banking crisis that started in the USA and later seen in Europe. According to the source, who did not want to be named, the CEO of Berkshire Hathaway had a meeting with senior officials of the Biden administration about the banking crisis. Details of the meeting are not yet known, but are allegedly about Buffett’s possible investment in struggling regional banks.
He had helped Goldman Sachs and Bank of America
Buffett has also supported banks in the past. During the 2008 economic crisis, the billionaire extended a $5 billion lifeline to Goldman Sachs through his company, Berkshire Hathaway, to avoid the same fate as Lehman Brothers. It also provided funds to Bank of America, whose shares fell sharply in 2011.
The wave that started in the USA reached Europe
The sudden bankruptcy of Silicon Valley Bank on March 10 shook confidence in the banking system and led to massive declines in bank shares. The wave that started in the USA has also reached Europe. Shares of Credit Suisse, one of Switzerland’s largest banks, also experienced the biggest drop in history at the close on Friday. The situation alarmed Swiss authorities, and negotiations over the weekend concluded that UBS would acquire Credit Suisse. The latest news is that UBS has agreed to buy the bank for over $2 billion.
All eyes on what’s to come next week
It is eagerly awaited how the banking crisis will progress next week, when the Fed will announce its interest rate decision. The US central bank will announce its interest rate decision on Wednesday, after two days of meetings. The expectation of the markets is that the interest rate will increase by 25 basis points, but it is noted that new developments may change this expectation.
The collapse of Silicon Valley Bank and Signature Bank this month has shaken confidence in the banking system and led to sales in banking stocks.
