on Wednesday that several banks engaged in misleading accounting to artificially inflate their profits. He gave the example of banks valuing their long-dated bonds at their par value instead of their market value, which hid the fact their value had fallen on paper.
"I don't like it when people get too focused on the earnings number and forget banking principles," Buffett said."Some of the dumb things that banks do periodically become uncovered during this period." The 92-year-old billionaire noted the banks that have run into trouble in recent weeks didn't make the same reckless errors they made in the lead up to the financial crisis. Instead, they mismanaged their assets and liabilities, which he described as an eternal temptation for banks that"bites them in a big way."
Buffett also underscored the importance of people feeling their bank deposits are safe."It's important that banks retain the confidence of the public and they can lose it within seconds," he said. The Berkshire chief said he sold certain bank stocks after seeing signs of trouble in their earnings. Buffett's company has pared or fully disposed of numberous financial stocks in recent years, including
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