The world’s richest man, Warren Buffett, is pumping $3bn into General Electric as part of a $15bn fundraising by the industrial conglomerate which is anxious to calm nerves about the health of its financial services arm.

In a resounding vote of confidence, Buffett’s Berkshire Hathaway investment empire is buying preferred stock in GE. The deal is similar to the billionaire’s $5bn leg-up to the Wall Street bank Goldman Sachs last week.

GE is the symbol of American business to the world, said Buffett. They have strong global brands and businesses with which I am quite familiar. I am confident that GE will continue to be successful in the years to come.

At the same time as issuing shares to Buffett, the company is offering $12bn of common stock to the public. GE’s chief executive, Jeffrey Immelt, said the proceeds would help to protect the company’s triple-A credit rating and could potentially fund acquisitions.

First, it enhances our flexibility and allows us to execute on our liquidity plan even faster, said Immelt. Second, it gives us the opportunity to play offence in this market.

GE is keen to reassure investors over the prospects for its finance division, GE Capital, which generated 45% of group profits last year. The size of the operation has raised questions about GE’s exposure to the credit crunch, prompting a slide in the firm’s shares in the market’s recent sell-off of anything financial. GE Capital provides credit services to 130m customers including retailers, consumers, mortgage lenders and car dealers. Immelt described its activities last week as boring stuff with little connection to the exotic derivatives that have crippled the banking industry.

But concern about the company sparked a 9% sell-off in GE’s shares early today. After the company announced its fundraising early in the afternoon, the stock recovered ground but was still down 3.5% to $24.57 in late trading.

The presence of Buffett on GE’s share register is likely to provide encouragement for investors. The 78-year-old Nebraskan is one of America’s most respected stock pickers and his words carry weight among millions of savers. Buffett warned for years of the dangers building elsewhere in the financial industry, describing derivatives as financial weapons of mass destruction.

He is the only major financial institution that has ready cash to buy cheap assets, said Tom Sowanick, chief investment officer at fund management firm Clearbrook Financial. You could actually call Buffett a mid-western vulture fund who is eating off the debris of the financial chaos.