Buffett attacks tests for banks

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US investor Warren Buffett has hit out at the government's "stress tests" of US banks, saying they do not properly assess the industry's health.

Mr Buffett's Berkshire Hathaway company holds stakes in three banks that underwent the tests.

He said the tests ignored differences in business models, but added it was right the government try to save banks.

The results of the stress tests were due to be published on Monday, but have been delayed until Thursday.

Referring to Berkshire Hathaway's holdings in Wells Fargo, US Bancorp and SunTrust Banks, he said, "I think I know their future, frankly, better that somebody that comes in to take a look.

"They may be using more of a checklist-type approach."

'One size fits all'

Mr Buffett was speaking at a news conference with Berkshire Hathaway vice-chairman Charlie Munger.

Mr Munger added: "This 'one size fits all' reasoning in the case of bank stress tests is very likely to be done poorly."

However Mr Buffett, who is the world's second-richest man, endorsed government efforts to stabilise the financial system.

"There is no reason ever in the United States to have a run on the bank," he said.

"The United States government has demonstrated that whatever it takes is what is going to get done, and they are right to do so."

Mr Buffett also criticised the strategy of companies buying back their own shares.

"Most of the repurchasing in recent years was foolish," he said, adding that companies tended to pay too much and the practice almost always destroyed value.