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?
Maybe Philadelphia could get a few headquarters out of it if this happened. That would be awesome.— NickFromGermantown- 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
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.- C92, Fed only has power til the President or a united Congress jerks its chain. That's why Bernanke like Greenspan and Volcker and Burns spends much time anticipating and mollifying and reacting to elected bosses. You think putting Congress in direct charge of Fed operations will improve performance? You really think putting bankers in direct control of money markets will create natural asset prices? THAT's naive.— Joe D
- Really? Thats funny. Since you opened the door, what politician will "jerk that chain" if they are dependant on the financing from...wait for it...you guessed it, BANKS! Dont be so naive...Congress and the President are bought and paid for and have been since 1913. Even President Wilson, when he signed the Act into law stated "...never has so few men, been in charge of so many people". Amazing was passes for education these days. The "Fed" is as federal as Federal Express.
- Well said Fernando08. Capitalism has met the enemy and it is itself.— A. Martinez
- The Fed isn't "privately controlled." It's a US government agency run by a Senate-ratified Presidential appointee staffed by government employees subject to federal government rules. More's the pity.— Joe D
- You can't be that naive can you? The "Fed" has NO GOVT OVERSIGHT what-so-ever. This is what Ron Paul has been fighting for. The Sr. Class A voting shareholders of the "Fed" are none-other-than: Goldman, Morgan, Warburg, Rothschilds, etal...These private banks use the "Fed" to manipulate the markets, currency supply, interest rates and lending. Do some homework and you will further find that the shareholders themselves often work clandestinly to undermine any elected official which challenges their rule. Presidents Andrew Jackson, Thomas Jefferson, George Washington all warned of central banking. Abraham Lincoln and JFK both took efforts to remove control from bankers.
- Joe D is correct and citizen92 is as ignorant as 95% of Ron Paulers. The FED is the chief banking regulator and they report to and get their mandate from Congress. — tr88
- The repealing of Glass Stegal = Transition of nearly $28T in wealth from private individuals and small business to Corporate Bankers under the protection of the privatley controlled "Federal" Reserve Bank and the loss of nearly 30MM American jobs.
- [...] The repealing of Glass Stegall will go down as one of the single most ignorant selfish moves in US history. Moreover, the fact that Americans STILL haven't held the culprits responsible makes me ashamed of being...American.
Comment removed.- Actually it was Bill Clinton who signed it into law. So again, you only tell half truths.
The year to date bank failure number: 38!! Banks are still dying. The mechanism of the circulation of capital, in all its useful formations, is dying the death of a thousand cuts. The federally chartered, now too big to fail behemoths, including Mr Weil's Citi control over half of the banking in the US. For all intents and purposes, American banking are the handful of too big too fail giants. Because it is just a matter of time before almost all local, state chartered banks fall victim to the declining economic conditions for the communities they service. The profitable communities will be raided for the best of the best customers and no new local banks, do novo's will spring up like green shoots heralding a come back on Main St. The great middle class of America is being bled dry, tossed into the arena of gladiatorial survival of globalization like the least educated and prepared for society. And Mr Weil in his insatiable greed for larger and larger deals, to fuel endless increases in return on investment is the author of the doomsday machine for capitalism. The world is not enough for the hundreds in $TRILLIONS in derivatives, swaps and assorted financial innovations that serve only a measly less than 1% of the filthiest of the the filthy rich. We are all living through a slow motion disintegration of the world we once knew and entering in the uncertainty of finance gone mad.- How many banks are there in the US taking deposits?— Wilhelm Von Humboldt
- anything but admit that tbtf was a farce used to funnel taxpayer money to connected bankers that help finance wars and other irresponsible federal spending.— dreinterests
- Regisration of derivatives, which Brooksley Born tried to accomplish, also was shut down by Greenspan, Summers and Rubin. Geithner is their protege, still opposing it. Derivatives registration still is pending; Obama is asleep at this wheel, or narcotized by Wall Street money, as is most of Congress. See the Frontline program "The Warning", and read Extreme Money, by Satyajit Das. http://www.pbs.org/wgbh/pages/frontline/warning/view/ Derivatives are essentially insurance contracts, which could be regulated by state insurance agencies if Congress would get out of the way. Require parties to derivatives to have serious actual money at stake and they would dry up fast.— Jay375
- Include Tim Geitner and Larry Summers, who are President Obama favorites. Criminally stupid folks.— joedog
