Newspaper article The Journal (Newcastle, England)

Billionaires Put the World to Rights

Newspaper article The Journal (Newcastle, England)

Billionaires Put the World to Rights

Article excerpt

TOP US billionaires Warren Buffett and Charlie Munger have said the most important lessons of the global financial turmoil are that companies should borrow less and build a system that imposes severe disincentives for failure.

Berkshire Hathaway's top two executives offered that frank assessment of what led to the current recession at a news conference after 35,000 attended the company's annual meeting in Omaha in the United States.

The two men also said most of the US's biggest banks are not too big to fail, but consumers should not be worried about bank failures because of protections built into the system..

Mr Buffett said having severe disincentives for failure and proper incentives for success are key to ensuring large financial institutions are run well.

He said people had not become more greedy in the last decade, but it was not hard for them to take advantage of the system.

"I think the most important lesson is the world needs a whole lot less leverage," said Mr Buffett, Berkshire's 78-year-old chief executive and chairman. …

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