Buffett criticizes crisis management in the banking sector

Warren Buffett He offered a vote of confidence to the United States and his company Berkshire Hathaway Inc on Saturday, but criticized the handling of the recent crisis in the banking sector and said that a showdown over the debt ceiling could bring “turmoil” to the global financial system.

In his speech at the annual meeting of his conglomerate Berkshire Hathaway Inccriticized the way politicians, regulators and the press have handled the recent bankruptcies of Silicon Valley Bank, Signature Bank and First Republic Bank, saying their “very poor” messaging has unnecessarily scared depositors.

“Fear is contagious,” he said. “You can’t run an economy” when people worry about whether their money is safe in the banks.

Buffett he also warned of growing “tribalism” in Washington, where partisanship makes people talk too much. “We have to sort of hone our democracy along the way,” he said.

Buffett spoke hours after Berkshire reported a quarterly profit of $35.5 billion and said it had repurchased $4.4 billion of its own shares, a sign it views the shares as undervalued. Instead, he sold $13.3 billion of shares in other companies.

The sixth richest person in the world runs Berkshire since 1965 and among its dozens of companies are the Geico auto insurer and the BNSF railroad. Berkshire also owns $328 billion in stock, about half of it in Apple Inc.

Buffett92, said regulators were right to guarantee their money to bank depositors Silicon Valley Bankstating that failure to do so “would have been catastrophic”.

He added that shareholders and bank executives should bear the risks of mismanagement.

“A lit match can become a conflagration or it can go out,” Buffett said. “You have to punish people who do things wrong.”

Buffett also said he couldn’t imagine politicians or regulators being willing to “disrupt the global financial system” even if Washington fails to break its deadlock over raising the debt ceiling.

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