Charles Munger, the vice chairman at Warren Buffett's Berkshire Hathaway Inc., said the leaders of his political party risk going too far in their efforts to reduce oversight of banks.
"My fellow Republicans — the ones taking away all this regulation of major finance — I think that's bonkers," Munger, 93, said Monday on CNBC.
Munger is known for his outspokenness, and some of his views contrast with those of Buffett, a Democrat. For instance, Munger supports a plan by President Donald Trump's administration to encourage companies to bring back funds that have been kept overseas where they avoid U.S. taxes. However, the Berkshire executives agreed in the televised joint interview Monday that the U.S. would benefit from a government system that offers health care for all.
Buffett and Munger have been saying for years that the financial system benefits when government oversight prevents excesses. The issue took on added urgency after the financial crisis prompted Congress to pass the Dodd-Frank Act of 2010, tightening regulation. Trump, a Republican, has called the legislation a "disaster," saying he believes it has made it extremely difficult for businesses to get loans.
Lenders that benefit from government backing of customer deposits should be obligated to "behave in a pretty careful, standardized way," according to Munger. He said he's OK if dealmakers have to look beyond the major banks for financing on potentially risky transactions.
