1074749 SIP myths you must know!

On the financial crisis of banks in the United States, Warren Buffett criticized the government and regulators. He stated banks may face pressure amidst rising interest rates and concerns of a slowdown. Speaking at Berkshire Hathaway’s annual shareholders’ meeting, Buffett, a world-renowned investor, stated that if investors start worrying about the safety of their deposits in banks, it’s not good for the economy in any way. The chairman and CEO of Berkshire Hathaway took aim at the US government, stating that in such an environment, the economy cannot function properly. The government and regulators cannot run away from responsibility of the financial crisis of banks.

In response to the questions of shareholders, Buffett said that banks in the United States could face pressure amid concerns about rising interest rates and recession. Due to the slowdown in economic activity, their earnings could decline year after year.

Many small and midsize banks in the US have been trapped in crisis due to the rising cost of debt. Silicon Valley Bank, First Republic, and Signature Bank were the first to experience this crisis. Now, PacWest Bancorp and Western Alliance Bancorp are also facing similar crises. The shares of these banks are seeing a significant decline in the US stock market. In such a scenario, this meeting of Buffett was considered quite important. Investors were enthusiastic about participating in this meeting held in Omaha, the main city of the United States.

Answering the questions of thousands of shareholders in the AGM, he said that to move forward on the economic front, we will have to strengthen our democracy. Regarding guaranteeing the depositors of Silicon Valley Bank, Buffett said that the regulators were right in this case. If they haven’t done so, the situation would have been even more alarming.

Addressing the shareholders, the company’s Vice Chairman Charlie Munger said that bank management should also take responsibility of the current crisis. He said that bank officials should take care of their customers. Instead of worrying about customers’ money, bank officials kept thinking about getting rich themselves. The result of this thinking is in front of everyone today.

Berkshire Hathaway, led by Buffett, announced excellent results for the first quarter of 2023. During this period, the company earned a profit of $35.5 billion. The significant contribution to this profit came from the gains made on Apple Inc. shares. The company’s cash reserves has now exceeded $130 billion. The company’s quarterly operating profit increased to $8.07 billion, which is 13% higher than the same quarter last year.