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‘our banks are in far better shape than 10 or 15 years ago’


At the annual Berkshire Hathaway shareholders meeting live streamed on Yahoo Finance, Warren Buffett discusses his view on the banking industry.

Video Transcript

This question comes– circles back to banking, which you touched on earlier. But Jerome Bernard from Switzerland writes, “Could you please explain why you decided to exit most of your bank stocks in 2020 except for Bank of America? And what’s your view on the future of the banking industry?”

WARREN BUFFETT: I like banks, generally. I just didn’t like the proportion we had in it compared to the possible risk if we got bad results that did not– so far we haven’t gotten. So I just– and I– we were over 10% of Bank of America.

It’s a real pain in the neck both to the bank and– more to the bank than to us if we go over 10%. There’s just a whole [INAUDIBLE]– and I like the Bank of America. I mean– and I like Brian Moynihan very much. And I like the banking business fine.

So we took that up, but we took the overall bank position down. We don’t want to go above [? 10% ?] in any of the others. And we didn’t want to increase the B of A position.

But we overall didn’t want as much in banks as we ha– we like– the banking business is way better than it was in the United States in– 10 or 15 years ago. The banking business around the world in various places might worry me. But we– our banks are in far, far better shape than 10 or 15 years ago.

But when things froze for a short period of time, the biggest thing the banks had going for them is that the Federal Reserve was behind them. And the Federal Reserve is not– they’re not behind Berkshire. It’s up to us to take care of ourselves.



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