Berkshire tightens insurance for bank deposits

(Reuters) - Billionaire investor Warren Buffett's Berkshire Hathaway Inc has told one of its units to stop insuring bank deposits above the amount guaranteed by the U.S. federal government, the Wall Street Journal reported.

The subsidiary, Kansas Bankers Surety Co, is notifying about 1,500 banks in more than 30 states that it will no longer offer a program called "bank deposit guaranty bonds."

The order was made on Monday by Buffett, Berkshire Hathaway's chief executive, two people briefed on the matter told the Journal.

KBS is an 18-employee subsidiary of Berkshire Hathaway, according to the parent firm's 2007 annual report. It is one of a handful of firms that offer such insurance, a big selling point for banks trying to attract wealthy customers.

No one was available at Berkshire Hathaway for comments.

LaoPo

Berkshire tightens insurance for bank deposits

(Reuters) - Billionaire investor Warren Buffett's Berkshire Hathaway Inc has told one of its units to stop insuring bank deposits above the amount guaranteed by the U.S. federal government, the Wall Street Journal reported.

The subsidiary, Kansas Bankers Surety Co, is notifying about 1,500 banks in more than 30 states that it will no longer offer a program called "bank deposit guaranty bonds."

The order was made on Monday by Buffett, Berkshire Hathaway's chief executive, two people briefed on the matter told the Journal.

KBS is an 18-employee subsidiary of Berkshire Hathaway, according to the parent firm's 2007 annual report. It is one of a handful of firms that offer such insurance, a big selling point for banks trying to attract wealthy customers.

No one was available at Berkshire Hathaway for comments.

LaoPo

I'm actually kind of surprised that Buffet waited this late in the game to pull the KBS programs, I guess the old man really is slippping. He did manage one hel_l of a run though for the past 50 years

Here is an interesting overview on the Banking System and where it has gotten to of recent years. A little long video but I thought it was worth viewing:

Banking 101 - http://video.google.com/videoplay?docid=-9...51279&hl=en

I am not sure what this means & why you say watch your deposits.

Can you explain?

This is just for wealthy clients who deposit more than 250k right? ( now that the FDIC is raised its limit )

Not that I think the FDIC could withstand a real run