The Financial Supermarket RIP
- Joshua M Brown
- July 25th, 2012
Sandy Weill, the original architect of Too Big To Fail, systemically risky banking here in the US has changed his tune. He does not apologize for the Citigroup he built or its imitators, claiming instead that they were "right for that time." But now, he tells CNBC Squawk Box this morning, the time has come to separate investment banking and trading activities from deposit institutions. This is a major blow to the Systemic Six and their lobbying efforts to maintain the status quo...
Some direct quotes via CNBC:
“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...
“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, they can make some mistakes, but they’ll have everything that clears with each other every single night so they can be market-to-market...
"I want to see us be a leader, and what we’re doing now is not going to make us a leader"
Unbelievable. One wonders whether or not he is sincere or if there is some angle. or perhaps this is about burnishing his legacy. Or maybe he means it.
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The Reformed Broker is a blog about financial markets and the economy. Joshua Brown is a New York City-based investment advisor for high net worth individuals, charitable foundations, retirement plans and corporations... More.