Since early March, the crisis has affected four regional banks in the United States, three of which were subsequently taken over by other establishments with the help of the authorities.
Regarding two banks, “Silicon Valley” and “Signature”, the Federal Deposit Insurance Corporation made a controversial decision to support uninsured deposits within them to avoid infection that could affect other banks.
By law, the foundation only guarantees a deposit of up to $250,000 in eligible banks.
Despite the unusual move, concern remains for custodians, as Buffett said at his Berkshire Hathaway Group’s annual shareholder meeting.
“It shouldn’t happen. The case was very bad,” said the billionaire, who continues to lead his group despite being 92 years old.
“It has been weakened by politicians who sometimes have an interest in it being, and weak by government agencies. And I say weak by the press,” he added.
He explained that what happened with “Silicon Valley” showed a government takeover that was followed by expanded deposit insurance, but people were still “confused”.
Although JPMorgan Chase’s emergency takeover of the First Republic began on Monday and appears to have eased anxiety over the crisis, it has been a turbulent week.
Many medium-sized Wall Street banks were shaken, especially Bac West, whose stock fell 68% before recovering 82% in Friday’s trading.
On Saturday, the Berkshire Hathaway Group reported a whopping $35.5 billion in first-quarter profits, due to strong performance in 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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