Buffett warns of signs of vulnerability in the banking system, market panic may lead to investor withdrawals.

Warren Buffett warns that as the relationship between banks and non-banking institutions grows increasingly closer, he observes signs of fragility in the banking system. The legendary investor says that financial system stability should be the top priority for the Federal Reserve. He points out that banks like JPMorgan Chase are crucial parts of the economy, handling trillions of dollars in funds every day. "They affect each other, and one's trouble can spread to another," Buffett said in an interview with CNBC on Tuesday. Recent turbulence in the credit markets has raised concerns about the balance sheets of banks and private credit funds, leaving investors feeling uneasy. Buffett says that if panic sweeps the market, many investors may choose to exit. "If someone yells 'fire' in a crowded theater, even though everyone will run, being the first to the door is still advantageous," Buffett said. "I'll be standing at the back saying, 'Stay calm,' but that's because I'm not a fast runner."