Warren Buffett says US banks won’t cause problems for economy

OMAHA — Billionaire Warren­ Buffett says that American banks are stronger than they have been in years and won’t derail the economy.

Buffett, who is chairman and chief executive of Berkshire Hathaway Inc., told Bloomberg television that the nation’s biggest banks have improved their financial position considerably.

‘‘The banks will not get this country in trouble, I guarantee it,’’ Buffett told Bloomberg television in an interview that aired Thursday.


Berkshire Hathaway has large investments in Wells Fargo & Co., US Bancorp, and Bank of America Corp., and Buffett pays close attention to their condition. Berkshire also holds warrants to buy $5 billion in Goldman Sachs shares.

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Buffett said the banks have largely cleared out the bad assets that hurt their balance sheets. And the current low interest rates have helped them.

‘‘Our banking system is in the best shape in recent memory,’’ Buffett said.

The country’s 19 biggest banks are about to undergo Federal Reserve ‘‘stress tests’’ to see if they could withstand a severe US recession and a global downturn simultaneously.

Buffett said Bank of America may soon try to repurchase the preferred shares he bought for $5 billion in summer 2011. Buffett would like to keep the shares because they come with $300 million in annual dividend payments, but he said he expects the bank to pay Berkshire $5.25 billion to end the dividend payments whenever it makes sense for Bank of America.

Associated Press