In his own words
Munger on Banking
7 sourced quotes. All themes
“Banking is a very peculiar business. The temptations to do something stupid are way bigger in banking than they are in most businesses. There are a lot of ways in banking to make your near term future look good by taking risks you really shouldn't take for the sake of your longer term future.”
“Imagine a balance sheet item labeled: 'Asset — good until reached for.'”
On the hidden risk in a derivatives book.
“I think a good litmus test of the mental and moral quality at any large institution would be to ask them, 'Do you really understand your derivatives book?' Anyone who says yes is either crazy or lying.”
“I don't think anybody could ever buy a bank who doesn't have a feeling for how really shrewd the management is. Banking is a field where it's easy to delude yourself into reporting big numbers that aren't really being earned. It's a very dangerous place for an investor.”
Lightly cleaned from a rough spoken transcript.
“All over America, you've got people hiding their problems and papering them over with accounting tricks when they start to arise. That is not our style around here. We like to address them.”
“A bunch of elderly people that have done things a certain way for a long time now have to deal with a standard like a mosquito catcher. They know how to smack mosquitoes. They just can't handle gnats.”
On financial regulators after the FTX collapse.
“Why run a casino in drag when you can run a real casino?”
From a note-taker's paraphrase; on banks running derivatives 'casinos.'