Billionaire and celebrity investor Warren Buffet warned on Wednesday that more bank failures could occur in the near future, amid lingering economic concerns in the United States.
“We’re not above bank failures, but depositors haven’t had a crisis,” Buffet said Wednesday during an appearance on CNBC. scream box. “Banks are going bankrupt. But depositors won’t be hurt.”
Buffet went on to say that while more bank failures could occur in the United States, he noted that depositors shouldn’t worry, saying, “No one will lose money on a deposit in a bank. It’s not going to happen…you don’t need to turn a stupid decision by managers into a panic of all the citizens of the United States about something they don’t need to panic about.”
Buffett’s comments come amid lingering worries about the US economy following the collapse of Silicon Valley Bank earlier this year.
In March, the Federal Deposit Insurance Corporation (FDIC) announced that Silicon Valley Bank had collapsed and said, “To protect insured depositors, the FDIC created Deposit Insurance National Bank of Santa Clara (DINB). The FDIC, as receiver, immediately transferred all of Silicon Valley Bank’s insured deposits to the DINB.”
Before its collapse, Silicon Valley Bank had about $290 billion in assets “and about $175.4 billion in total deposits,” the FDIC said.
Shortly after the collapse of Silicon Valley Bank, Signature Bridge Bank went bankrupt and was taken over by Flagstar Bank, a subsidiary of New York Community Bancorp.
Following the Silicon Valley Bank collapse, a number of other banks suspended stock trading.
The collapse of Silicon Valley Bank and Signature Bridge Bank has raised concerns across the economy and whether it could lead to a financial crisis similar to that of 2008, following the Lehman bankruptcy. Brother.
However, last month Treasury Secretary Janet Yellen said the current banking crisis was “different from that of 2008”.
“We don’t see this situation in the banking system today,” Yellen told a banking conference. “Our financial system is also significantly stronger than it was 15 years ago…Things are stabilizing and the US banking system remains strong.”
“Similar actions might be warranted if smaller institutions experience deposit runs that pose a risk of contagion,” Yellen added, regarding the actions taken in the wake of the Silicon Valley Bank collapse.
When he appeared on scream boxBuffett was also asked about Federal Reserve Chairman Jay Powell’s interest rate hike and how he would advise Powell.
“I would say he should do what he thinks is in the best interests of the United States,” Buffett said.
Newsweek contacted Berkshire Hathaway via email for comment.