Curb Quote by Warren Buffett
“Can you know you can have institutions that put curbs on that in various ways, and actually what the banks, you know, they have various capital ratios and that sort of thing, but the banks got around them, I mean, they set up sieves and that sort of thing just to get more leverage. People love leverage when it's working. I mean, it's so easy to borrow money from a guy at X and put it out at X.”
About This Quote
Source Interview: CNBC, 2023
Banks manipulate regulations to increase leverage, exploiting loopholes for profit.
In simple terms: Banks find ways around rules to borrow more.
Key Takeaway
Beware hidden financial risks and leverage.
Themes
finance
regulation
risk
ethics
Mood
cautious
critical
Type
analytical
informative
When to use this quote
- investment decisions
- policy analysis
- risk management
- corporate governance
Key Concepts
leverage
regulatory arbitrage
systemic risk
Questions to Reflect On
- How can investors detect hidden leverage?
- What reforms could close such loopholes?
A Different Perspective
The anecdote may oversimplify complex banking systems.
