Thursday, July 26, 2012

Now Break Up the Big Banks

Wall Street Perpetrator Sandy Weill: Now Break Up the Big Banks


Sanford I. Weill, what a hypocritical ass

Update: See also The Citigroup CEO Who Broke Glass-Steagall Wants It Back.

Sanford I. Weill, what a hypocritical ass.  Back in the Clinton administration, before they finally killed Glass Steagall, Sandy put together Citigroup. 

 At the time, it was a violation of Glass Steagall.

 He did it anyway, believing, correctly, that Congress and the regulators would do nothing.  He was right, they did nothing but repeal Glass Steagall.

In an interview, he actually said that Glass Steagall was not necessary and the bank would be so big that the safety net would be the U.S. government.  He’s always been on my list of one of the destroyers of our financial system.  Now, look what this ass says below. 

An apology at least would be nice!

From CNBC

Former Citigroup Chairman & CEO Sanford I. Weill, the man who invented the financial supermarket, called for the breakup of big banks in an interview on CNBC Wednesday.
“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 told CNBC’s “Squawk Box.”
He added: “If they want to hedge what they’re doing with their investments, let them do it in a way that’s going to be market-to-market so they’re never going to be hit.”
He 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.
“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 (the Volcker rule explained), they can make some mistakes, but they’ll have everything that clears with each other every single night so they can be marked-to-market,” Weill said.
He said banks should be split off entirely from investment banks, and they should operate with a leverage ratio of 12 times to 15 times of what they have on their balance sheets. Banks should also be completely transparent, Weill said, with everything on balance sheet. “There should be no such thing as off balance sheet,” he said.
If banks hedge in any way, Weill added, positions should be marked-to-market (marked-to-market explained) and cleared through an exchange.
Weill said that by breaking up banks, they would be “much” more profitable.
“This is what all the regional banks do and everybody says buy regional banks,” he said. “They’ll just be bigger regional banks.”
Weill suggested that breaking up banks is the only way to rebuild the financial industry’s reputation in the wake of recent scandals and missteps.
“I want to see us be a leader, and what we’re doing now is not going to make us a leader,” he said.

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