Warren Buffett just got a great deal. Bank of America, not as much. Sure, the announcement the legendary investor would purchase $5bn in preferred stock in BofA while receiving warrants for 700 million shares of common stock sent the bank's shares soaring. And the deal has benefits.

First, the bank showed it was able to raise capital, albeit at a hefty price. It also signalled that chief executive Brian Moynihan recognised he can't simply ignore the market's demand that the bank act to bolster confidence, another positive. The deal also adds an extra buffer between creditors and any potential losses, which should further reassure jittery debt markets. And BofA got the Buffett stamp of approval.