Warren Buffett and former Wells Fargo boss Richard Kovacevich are friends, and Berkshire Hathaway's largest holding is Wells Fargo. Of course, even friends can disagree, but that might be a bit of an understatement when it comes to TARP—the Troubled Asset Relief Program, largely credited with saving the financial industry from collapse in 2008.
In his latest interview on CNBC's "Squawk Box," Kovacevich said he stands by the assertion he made last month on the show that TARP ruined the banks. He was responding Friday to comments made a day earlier by Buffett and Hank Paulson, the major architect of the financial bailout.
(Flashback: TARP didn't save banks, it ruined them: Kovacevich)
Asked what he thought of Kovacevich's harsh criticism of TARP in September, Buffett said the rescue package was necessary to restore faith in the banking system. Confidence is "like oxygen," he continued, "when it's there, you don't even notice it. When it disappears, it's the only thing you notice."
Appearing alongside Buffett, former Treasury Secretary Paulson said: "When capital was put in what you will see, if you look at it, is that confidence was increased. Credit spreads came in, the markets did better. It made a huge difference. It was a turning point."
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