Berkshire Hathaway CEO Warren Buffett appeared this morning on CNBC’s Squawk on the Street and dismissed criticisms over the size of large banks:
Andrew Ross-Sorkin: "Do you think the banks are still too big? Wells Fargo, which I know you have a big stake in, JPMorgan, which you have a personal stake in?"
Warren Buffett: "Our banks in this country are less concentrated than many other countries' -- including Canada, which did a first class job getting through the problems of a few years ago. I don't have a problem with the size of banks. You need capital commensurate with size and [you] need regulation, but size did not cause the problems."
As we're pointed out in “Breaking up big banks would weaken the U.S.” in The American Banker, large diversified institutions deliver real, unique, and significant economic value that clients, customers, investors, and depositors rely on. To be a global leader, the United States needs institutions of all sizes to serve the financial needs of the world's largest and most diverse economy.
Buffett also addressed the strength of the U.S. banks compared to European banks on May 5th at Berkshire’s annual shareholder meeting in Omaha, NE by saying the nation’s lenders have “liquidity coming out of their ears,” and that “the American banking system is in fine shape. The European system was gasping for air a few months back [until getting assistance from the European Central Bank.]”
U.S. banks have passed numerous stress tests administered by the Federal Reserve, even as recently as March 13, which shows they continue to take the necessary steps to strengthen the safety and soundness of their own businesses as well as the U.S. economy.
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