Warren Buffett said there would have been “catastrophic” consequences if US regulators had not insured the deposits at Silicon Valley Bank and Signature Bank, as their failures risked sparking a run at lenders across the country.“Even though the FDIC [Federal Deposit Insurance Corporation] limit is $250,000 . . . that is not the way the US is going to behave anymore than they’re going to let the debt ceiling let the world go into turmoil,” the Berkshire Hathaway chief executive told tens of thousands of shareholders gathered in downtown Omaha for the company’s annual meeting on Saturday.
The comments follow a series of bank failures in the US that have stoked debate over the intervention of the federal government, which safeguarded deposits at both SVB and Signature Bank above the $250,000 level covered by federal insurance.
Regulators were able to bypass that limit by designating both as systemic risks. While shares of regional banks have swung wildly in recent trading sessions, depositors have been somewhat calmed by the implicit guarantee that the government would intervene in the crisis.