Here's How Warren Buffett Convinced Wells Fargo To Pursue Investment Banking

Bloomberg Market Magazine has a feature on Wells Fargo's expansion into investment banking this month, and it's prefaced with a fascinating anecdote on how Warren Buffet inspired the bank into the venture.It was 2009, and Buffett's Berkshire Hathaway—one of Wells Fargo's biggest shareholders—had just announced they would purchase railroad operator Burlington Northern Santa Fe Corp.. To finance that deal, Berkshire had chosen JP Morgan.Richard Kovacevich, then the chair of Wells Fargo, had the following string of thought:“Here we are, our largest shareholder, and we had never done any meaningful investment banking for him,” recalls Kovacevich, 68, who stepped down as chairman in 2009 but continues to consult with management and represent the company to customers. “I called him and said we’ve got some great bankers here now, this is important and we’d really like to show you what we can do.”Wells Fargo has long kept a focus on traditional retail banking over riskier investment banking, a move that many in the industry say have resulted in the firm's health amidst such volatile economic conditions. But the Bloomberg Markets piece highlights the bank's attempt to carve a path into the investment banking industry at a time when the industry is experiencing revenue losses and mass layoffs.Read the whole Bloomberg Markets report here >Please follow Clusterstock on Twitter and Facebook.Join the conversation about this story »See Also:President Endorses The Buffett Rule And Calls For New Penalties For Insider Trading By Members Of CongressWarren Buffett's Touching Tribute To His SecretaryWharton MBAs: Lay Off Mitt, He's Just Like Warren Buffett

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