2021: Why did Buffett sell most of Berkshire's banks in 2020?

BECKY QUICK: This question circles back to banking, which you touched on earlier. But Jerome Bonnard 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 them, 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 — more to the banks than to us, if we go over 10%, there’s just a whole lot of —

And I like Bank of America. I mean — and I like (CEO) 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 didn’t want to go above 10% in any of the others. And we didn’t want to increase the BofA position, but we, overall, didn’t want as much in banks as we had.

We like — the banking business is way better than it was, in the United States, than 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 (laughs) 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.