Former Citigroup CEO says 'Break Up the Megabanks'
Widely credited with inventing the 'supermarket model' of financial firm, Sandy Weill's reversal speaks volumes
Sandy Weill, former CEO of banking giant Citigroup and widely regarding as the creator of the "financial supermarket" model that dominates global capitalism, made waves today by saying that he believes the largest US banking conglomerates are unnecessary, harmful, and should be broken up.
“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 to CNBC’s morning financial show “Squawk Box” on Wednesday.
Given an opportunity to walk back his comments by the show's moderators, Weill refused and clarified that his position was exactly as he stated it. When the moderators suggested he was being tougher on Wall Street than former Fed Chair and Obama financial advisor Paul Volcker, Weill said, "I don't know if it's tougher or not, but I want to see [the United States] to be a leader" when it comes to financial industry reform.
Weill -- no friend to Occupy Wall Street-type activists or others on the progressive left who have called for busting up the nation's biggest banks and reinstating the Glass-Steagall act -- suggested that dismantling institutions like Citigroup and Bank of America and separating their commercial banking and investment arms is the only way to rebuild the financial industry’s reputation in the wake of the financial calamity they caused in 2008.
"Sandy Weill advocating for the reinstatement of Glass-Steagall is among the biggest flip-flops imaginable," writes Mother Jones' Kevin Drum. "In political terms, it would be akin to Rick Santorum announcing he was becoming a GLAAD spokesman." And continues:
To some, Weill's sudden about-face reeks of hypocrisy. Others are picking it over for evidence of ulterior motives. (Could Weill be trying to undermine his former protégé and another too-big-to-fail banker, JPMorgan CEO Jamie Dimon?)
Who knows? It's actually not all that uncommon for elder statesmen who are no longer running things to have a change of heart, and it seems likely that's what's happened here. And like other similar U-turns, it probably won't have any impact at all. Nonetheless, it's pretty intriguing. When even Sandy Weill thinks banks have gotten too big to fail, is there anyone left to disagree?
Here's the video (via TPM media):
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