Warren Buffett said that banks hold on their balance sheets too many derivatives - based on AMarkets.
This fact makes it unattractive investments in most of the major financial institutions. Derivatives carry hidden risks. "Some of these tools have become so complex and misunderstood, that they are almost impossible to assess. I do not think that analysts understand how derivatives are themselves novel, "- said Buffett at the annual meeting of shareholders Berkshire Hathaway.
As Buffett himself said, with an increase in the risk of nuclear attack or cyber attacks, to assess the portfolios of derivatives will not be possible. Any sudden change in the environment can seriously "poison" the market.The protective mechanisms built into derivatives, Buffett considers unreliable, and therefore recommends that such assets to ordinary investors. The billionaire has long been critical of derivatives. Despite this, Berkshire invests in certain derivatives .