Richer you are, bigger is your loss -- this seems to have come true for world's richest person Warren Buffett with a whopping first quarter loss of $1.6 billion in derivatives, an amount bigger than total exposure of all Indian banks to these financial instruments.
In its financial results for the period ended March 31, Berkshire Hathaway disclosed a notional loss to the tune of $1.6 billion in different kinds of derivatives.
The company posted an unexpected 64 per cent plunge in net profit at $ 940 million for the Q1-08, from $ 2.59 billion in the year-ago period.
In 2002, Buffett had written in his letter to Berkshire shareholders that "derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potential lethal".
Buffett was named world's wealthiest in March with a net worth of $52 billion by the Forbes magazine in its annual ranking of the richest billionaires.
The losses incurred by the companies across the world in derivatives have emerged as one of the biggest factors behind the ongoing crisis in the global financial markets.
While the impact has been seen in India as well, the magnitude is nothing when compared with the US and Europe.
In an interview with PTI, K V Kamath, head of India's largest bank ICICI Bank and newly-appointed president of apex industry chamber CII, said last week the total derivatives- related exposure of the country's all banks put together might be just a quarter per cent of their 500 billion dollars balance sheet.
Even though a number of Indian banks made provisions for derivatives-related losses in their latest quarter results, the figures are negligible when compared to global giants like Citigroup, UBS and Merrill Lynch.