Seventeen years ago Warren Buffett strode into a press conference to introduce himself to 100 reporters and photographers as the new chairman of Salomon Brothers, writes Marcus Leroux.

He had bought a 12 per cent stake in the bank in 1987 to ward off a hostile takeover, but now, on August 18, 1991, he was thrust into the limelight as Salomon teetered on the brink of collapse after a scandal in which it was caught manipulating US government bond auctions.

It fell upon Mr Buffett to save the bank after the US Treasury banned it from bidding in such auctions. The ban, he argued, would force Salomon into bankruptcy and that, in turn, would have “domino effects that would reach worldwide” - and Nicholas Brady, the US Treasury Secretary, reversed the ban. Salomon paid a $290 million fine.

So began the Sage of Omaha's foray into investment banking. “I don't know how long it will take to get this job done,” Mr Buffett told the press conference that day. “My job is to clean up the sins of the past.” He set out to change the gung-ho, high-rolling culture that had developed through the 1980s, immortalised in Michael Lewis's book Liar's Poker. He installed Deryck Maughan (now Sir Deryck) as chief executive and, working with the former British Treasury official, was able to put Salomon Brothers on a steadier path and helped to sell the company to Sandy Weill's Traveler Group in 1997.

Not surprisingly, Mr Buffett made a profit on his stake.

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