“They’ve never felt compelled to do anything because other banks were doing it, and that’s how banks get in trouble, when they say, ‘Everybody else is doing it, why shouldn’t I?'”
. As the largest shareholder of Wells Fargo through Berkshire, Buffett knows the San Francisco bank well. “Those guys have gone their own way,” says Buffett, explaining that the bank’s management has avoided risky investments like option ARMs (adjustable rate mortgages).
In his story “Riders on the Storm,” Lashinsky explores how Wells Fargo’s takeover of Wachovia made it a national force–but also burdened it with toxic assets. The piece appears in this year’s Fortune 500 issue, online now and on newsstands next week. –Jessica Shambora