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QuestionerHave the business practices of the investment banks become so complex that it is not possible for the head or the investment bank to beware of the exposures to financial risks day to day or week to week?
WarrenYeah, that's an exceptionally good question. And I think the answer probably is yes, at least in some places. Although there's a few investment bank heads, I've got enormous respect for their ability to search. sort of get their minds around risk. I think the big investment banks, a number of them, and big commercial banks, I think they're almost too big to manage effectively from a risk standpoint in the way they've elected to conduct their business. And it's going to work most of the time. So you don't see the risk. In a way that, I mean, you don't, you know, if you have a one in 50 year risk that a place will go broke, it may not be in the interest of a 62-year-old executive that's going to retire at 65 to worry too much about that. What you need is somebody at the top whose DNA is very, very much programmed against risk, and he is going to have to resist the entreaties of those who work beneath him who say everybody else is doing it. And if they can do it over there and make all this money doing it, why can't we be doing it here? And that's not easy to do. I mean, when you've got a bunch of high-powered people who are used to making in seven figures every year, and they want to do things and they say, if you don't do them here, we're going to go elsewhere. It's a very tough system to be. So I would say that in many ways, there are firms that in terms of risk, simply they are conducting themselves in a way that they're too big to manage. And if at the same time the government says they're too big to fail, that has some very interesting policy implications. It's crazy to have people get so big and so important that you can't allow them to fail and allow them to be run with as much navery and stupidity as permeated the major investment banks. It's not that Berkshire hasn't had wonderful service from investment banking all these years because we have. It's just that as an industry, this crazy, culture of greed and overreaching and overconfidence in trading algorithms and so on creeps in. And I would argue it's quite counterproductive for the country, and it ought to be rained way back.