Citi hypocrite Weill: Break up big banks
But won't return his multi-millions
Citi hypocrite Weill: Break up big banks
Joseph N. DiStefano
Sandy Weill, who paid himself hundreds of millions of dollars as a reward for persuading President Clinton and the Republican-led U.S. Senate and Federal Reserve to retroactively bless his acquisition of Citibank by his Travelers insurance and high-risk loan conglomerate, now says the policy was a mistake.
“What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail,” Weill said this morning on CNBC’s “Squawk Box.” More here.
Highlights:
CNBC says Weill "essentially called for the return of the Glass–Steagall Act, which imposed banking reforms that split banks from other financial institutions such as insurance companies." Clinton, aides Larry Summers and Robert Rubin (later a Citi executive), Fed head Alan Greenspan, U.S. Sen Phil Gramm and others all supported ending Glass-Steagall prohibitions and allow the growth of big, diversified financial companies like Citi and JPMorgan Chase & Co., after lobbying by Weill and his banking allies.
“I’m suggesting that they be broken up so that the taxpayer will never be at risk, the depositors won’t be at risk, the leverage of the banks will be something reasonable, and the investment banks can do trading, they’re not subject to a Volker rule" breaking up hybrid giant banks, Weill told CNBC. Banks should report "everything that clears with each other every single night" so their books will "mark to market" their current risk.
Banks "should be split off entirely from investment banks, Weill added. That would make them "much” more profitable, he said, citing the example of "regional banks" (like PNC, Citizens, TD). Weill's top collaborators have also recanted, notes Bloomberg here: "Richard Parsons," the ex-TimeWarner boss "who earlier this year ended a 16-year tenure on the board of Citigroup, said in April that the 1999 repeal of the Glass-Steagall law made the business more complicated and ultimately helped cause the financial crisis.
"Former Citicorp CEO John Reed," Weill's collaborator, "apologized in 2009 for his role in building Citigroup and said banks that big should be divided into separate parts."
Gotta hand it to them for admitting that policies so profitable for them personally are evil for American finance.
But none of them are promising to give back the fortunes they cashed in from Citigroup stock grants before the 2008 blow-up that proved the bankruptcy of the financial-supermarket commercial/consumer/investment/trading bank model and the failure of Clinton, Gramm, Greenspan, Summers and Rubin to protect American finance and its many users.
Shareholders, taxpayers, borrowers and laid-off staff paid to make these power-lobbying bankers rich. No penalty? No shame?
You people are funny. But you know what, wheather you agree with me or not these are the facts and they are indisputatble: Since the "Fed" was created - 1) Inflation is up over 1000%, 2) there have been 2 major Depressions/Recessions and over 28 other Rescessions, 3) There are been 3 major asset bubbles: Tech, Housing, Deriviatives, 4) 2 major wars, 4 minor endless wars, 5) a "War on Drugs" which is bleeding the country dry along with a "War on Terror". Since 1913, Americans have lost nearly $50 trillion in wealth, while bankers have confiscated nearly that same amount.
The "Fed" and banking has replaced monarchies with a new oligarchy and most uneducated citizens to too ignorant or stuid to realize its in plain sight.
The Fed sure has fed bubbles, especially under conservative monetarist Alan Greenspan. But check out the Panics of 1837, 1858, 1871, 1893, etc. That's why after 75 years without a federal bank Congress started another one. Kill the Fed -- and let the US Treasury run the money supply? State and local banks? Wall Street? No thanks.— Joe D- Maybe Philadelphia could get a few headquarters out of it if this happened. That would be awesome.— NickFromGermantown
