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Thread: Sandy Weill, In Stunning Reversal, Tells CNBC It's Time To Break Up The Banks

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    Sandy Weill, In Stunning Reversal, Tells CNBC It's Time To Break Up The Banks

    In a stunning reversal, a former big bank CEO who crusaded for policies that helped create the so-called "too-big-to-fail" banks now says we need to break up the banks
    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, and have banks do something that's not going to risk the taxpayer dollars, that's not going to be too big to fail," former Citigroup Chairman and CEO Sanford "Sandy" Weill told CNBC on Wednesday morning.

    Sandy Weill, In Stunning Reversal, Tells CNBC It's Time To Break Up The Banks

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    Re: Sandy Weill, In Stunning Reversal, Tells CNBC It's Time To Break Up The Banks

    Weill is the reason I pulled all my money out of Citibank back in 1999 after it took over the bank that I had my money in. The SOB knew all along that mixing investment banking and banking would tank the economy. He should be in jail, not on TV for what he and his crony pal's have done to this country.

    "...In April 1998 Travelers Group announced an agreement to undertake the $76 billion merger between Travelers and Citicorp, and the merger was completed on October 8, 1998. The possibility remained that the merger would run into problems connected with federal law. Ever since the Glass–Steagall Act, banking and insurance businesses had been kept separate. Weill and John S. Reed bet that Congress would soon pass legislation overturning those regulations, which Weill, Reed and a number of businesspeople considered not in their interest...."

    To speed up the process, they recruited ex-President Gerald Ford (Republican) to the Board of Directors and Robert Rubin (Secretary of Treasury during Democratic Clinton Administration) whom Weill was close to. With both Democrats and Republican on their side, the law was taken down in less than 2 years. Many European countries, for instance, had already torn down the firewall between banking and insurance[citation needed]. During a two-to-five-year grace period allowed by law, Citigroup could conduct business in its merged form; should that period have elapsed without a change in the law, Citigroup would have had to spin off its insurance businesses. Weill's office holds a wood etching of him engraved with the words "The Shatterer of Glass–Steagall". Weill denies that the repeal of Glass–Steagall played a role in the recent financial crisis.[3]

    Sanford I. Weill - Wikipedia, the free encyclopedia

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    Re: Sandy Weill, In Stunning Reversal, Tells CNBC It's Time To Break Up The Banks

    I often find great pearls of wisdom in the comments section of articles. On Yahoo's article about this subject, username Steve Pitorowski says this: (all emphasis added)

    The problem with the repeal of (Glass-Stegall) was that the taxpayer backed government guarantees that were part of that legislation were left in place after its repeal creating a huge moral hazard. The S&L crises of the late 80's exposed this hazard but the guarantees were left in place and expanded in some cases. Deregulation, lax oversight, fed interest rate policy, government guarantees, and tax policy all combined with other factors to create a moral hazard that encouraged risk taking (levereging) beyond anything reasonable. Large banks are not the problem, the problem is the idea that large banks can self regulate and manage their own risk when provided government guarantees of federal support in times of trouble. In essence, republican policy is the problem. Low tax, low regulation, no oversight, easy monetary policy only worked in the 30 year debt fueled consumption economy enabled by foreign capital.

    Mega-Bank Creator Sandy Weill Reverses Course, Says Break

    Tellingly, Weill is quoted on CNBC's Squawkbox saying: the monsters he created should be split up and "do something that doesn't risk taxpayer dollars."

    I find it interesting that now, since the only source of increased taxpayer revenue seems to be raising tax rates on the rich, suddenly taxpayer dollars shouldn't be at risk.

    He built up a house of cards to make hundreds of millions, let it all collapse, and left the U.S. taxpayer with the bill to fix it. To think that some people would call this guy a genius instead of the amoral creep that he is. He should be in jail next to Bernie Madoff.
    Last edited by ChuckBerry; 07-25-12 at 04:59 PM. Reason: added hyperlink
    The morality of abortion is not a religious belief, any more than the morality of slavery, apartheid, rape, larceny, murder or arson is a religious belief. These are norms of the natural law of mankind and can be legislated even in a completely religionless society.

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    Re: Sandy Weill, In Stunning Reversal, Tells CNBC It's Time To Break Up The Banks

    Quote Originally Posted by ChuckBerry View Post
    I often find great pearls of wisdom in the comments section of articles. On Yahoo's article about this subject, username Steve Pitorowski says this: (all emphasis added)

    The problem with the repeal of (Glass-Stegall) was that the taxpayer backed government guarantees that were part of that legislation were left in place after its repeal creating a huge moral hazard. The S&L crises of the late 80's exposed this hazard but the guarantees were left in place and expanded in some cases. Deregulation, lax oversight, fed interest rate policy, government guarantees, and tax policy all combined with other factors to create a moral hazard that encouraged risk taking (levereging) beyond anything reasonable. Large banks are not the problem, the problem is the idea that large banks can self regulate and manage their own risk when provided government guarantees of federal support in times of trouble. In essence, republican policy is the problem. Low tax, low regulation, no oversight, easy monetary policy only worked in the 30 year debt fueled consumption economy enabled by foreign capital.

    Mega-Bank Creator Sandy Weill Reverses Course, Says Break

    Tellingly, Weill is quoted on CNBC's Squawkbox saying: the monsters he created should be split up and "do something that doesn't risk taxpayer dollars."

    I find it interesting that now, since the only source of increased taxpayer revenue seems to be raising tax rates on the rich, suddenly taxpayer dollars shouldn't be at risk.

    He built up a house of cards to make hundreds of millions, let it all collapse, and left the U.S. taxpayer with the bill to fix it. To think that some people would call this guy a genius instead of the amoral creep that he is. He should be in jail next to Bernie Madoff.
    All we can do is pray that the gov't starts putting some bankers in jail. I believe the domino effect to follow would be similar to a voluminous healthy crap. Just don't put them in white-collar jails. Put them in those nice Republican jails in Texas.

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