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  • Writer's pictureBy The Financial District

Letting SVB Depositors Lose Their Money Is "Catastrophic": Buffett

Warren Buffett said that it would have been "catastrophic" to let any Silicon Valley Bank depositors lose their money when regulators seized the troubled California lender, David Sollerith reported for Yahoo Finance.

Photo Insert: In a bid to restore calm, US officials made the controversial decision to protect all depositors at the failed institution even if their accounts were above the $250,000 limit insured by the Federal Deposit Insurance Corp. (FDIC).



The fall of Silicon Valley Bank on March 10 triggered panic across the financial system.


In a bid to restore calm, US officials made the controversial decision to protect all depositors at the failed institution even if their accounts were above the $250,000 limit insured by the Federal Deposit Insurance Corp. (FDIC).



It did the same for depositors at Signature Bank, citing the systemic risk posed by the sudden collapse of both institutions.


Some observers have since called for the US government to raise the deposit insurance levels or provide system-wide protection of all deposits as a way of preventing any future bank runs.


All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

"I can't imagine anybody saying I'd like to be the one [on] television tomorrow and explain [to] the American public why we're keeping only $250,000 insured and we're going to start a run on every bank in the country and disrupt the world's financial system," Buffett said Saturday at the Berkshire Hathaway annual meeting.


Not protecting all depositors, he said, "would have been catastrophic."





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