Warren Buffett says ‘bank crisis not over yet’, explains what's happening to depositors' money
2 min read . Updated: 12 Apr 2023, 07:41 PM IST
PremiumWarren Buffett explain we are likely to see more banking failures but depositors' money will be safe due to Federal Deposit Insurance
Warren Buffett, the CEO of Berkshire Hathaway, expressed confidence in the company's future after he steps down from his position. He assured shareholders that Vice Chairman Greg Abel, who has been designated as the successor for several years, will do a great job and continue to follow the same model.
“The problem for our board of directors is the day I'm not around and Greg's running it, I am not giving him some envelope that tells him what to do next," Buffett said. But Abel and Berkshire will still be ready to say within minutes whether they are interested in an acquisition and have the resources to do it.
Buffett stated that Berkshire is "so damn lucky" to have Abel ready to take over as CEO because there aren't many executives like him out there. Abel already oversees all of Berkshire's non-insurance businesses.
Buffett and Abel appeared together on CNBC from Tokyo where they went this week to check up on several companies Berkshire invested in there in 2020 and promote the conglomerate. During the interview, the duo fielded a variety of questions, including the recent bank failures and whether railroads, including Berkshire's BNSF railroad, need to continue improving safety in the wake of several recent high-profile derailments.
Bank failure
Speaking about bank failures, Buffett said more banks will fail over time, but most people shouldn't worry about it because their money is protected by the Federal Deposit Insurance Corp.
“We're not over bank failures, but depositors haven't had a crisis," Buffett said. “Banks go bust, but depositors aren't going to be hurt."
Buffett, who is 92 years old, has no plans to retire, but has designated Abel as his successor. He emphasized that he will not be giving Abel an envelope with instructions for what to do next when he steps down, but Abel and Berkshire will still be ready to say within minutes whether they are interested in an acquisition and have the resources to do it.
(With inputs from agencies)