FT News Briefing Banks get ready for bad loans, losses at Berkshire Hathaway, BlackRock’s influence
May 4, 2020
Banks in the U.S. and Europe are bracing for over $50 billion in losses from bad loans, echoing past financial crises. Warren Buffett's annual meeting highlights Berkshire Hathaway's recent struggles amidst a changing market landscape. BlackRock's consultancy arm is gaining significant clout with governments, raising ethical concerns about its influence. The discussion also touches on the banking sector's challenges related to climate risks and the necessity for tighter regulations as BlackRock navigates these complexities.
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Banks Brace for Bad Loans
- U.S. and European banks are predicted to set aside over $50 billion for bad loans in Q1 2020.
- This mirrors levels last seen during the 2008 financial crisis, indicating widespread economic concern.
Berkshire Hathaway's Q1 Loss
- Berkshire Hathaway experienced a significant $50 billion loss in Q1 2020 due to the market selloff.
- However, the subsequent market rebound suggests potential recovery in the following quarter.
Impact on Berkshire Hathaway Subsidiaries
- Berkshire Hathaway's subsidiaries like BNSF Railway and GEICO have been impacted differently by the pandemic.
- BNSF saw decreased consumer shipments, while GEICO benefited from reduced driving and accidents.