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Buffett Slams Executives For US Bank Crisis, Calls For Accountability

Warren Buffett, the billionaire investor and philanthropist, recently spoke out against executives responsible for the mismanagement that led to the collapse of several US banks. At an annual meeting of Berkshire Hathaway shareholders in Omaha, Nebraska, Buffett criticized First Republic for offering “crazy” non-government-backed mortgages at fixed rates, some for ten years. He stated that those responsible for the failures should be held accountable.

Buffett’s business partner, Charlie Munger, had previously warned about bad commercial property loans in US banks and a looming storm in America’s real estate market. This sentiment was echoed last week when US regulators seized First Republic and it was acquired by JPMorgan, the country’s largest bank. Prior to its seizure, the San Francisco-based lender had received a $30 billion rescue package from a group of Wall Street banks in the form of deposits.

This move followed massive deposit runs in March that caused two regional lenders, Silicon Valley Bank and Signature Bank, to fail within days. Shares of PacWest and Western Alliance were also suspended after their prices fell dramatically, and several other regional US lenders plunged by at least 15%, causing investor concern about the financial health of other mid-sized banks.

Interestingly, it was reported in March that Buffet had been in contact with senior officials in the Biden administration to find ways to resolve the unfolding banking crisis. Buffet’s criticism highlights the need for better oversight and accountability in the banking sector, particularly in light of the potential impact of risky lending practices on the wider economy. It also underscores the importance of proactive measures to address systemic risks and prevent future crises.

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#BankingCrisis #BankingCollapse #USeconomy #WarrenBuffet #JPMorgan #SiliconValleyBank #SignatureBank #FirstRepublic

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