Jul 30, 2012

Weill calls to break up the big ‘supermarket’ banks

One can’t help but marvel at the hide of Sanford I. Weill, better known as Sandy Weill -- creator of Citigroup.

Adam Schwab — Business director and commentator

Adam Schwab

Business director and commentator

One can’t help but marvel at the hide of Sanford I. Weill, better known as Sandy Weill — creator of Citigroup and destroyer of the Glass-Steagall Act. Last week, Weill admitted that “supermarket” banks, of which his own Citigroup was the first, should be broken up.

Weill, a former member of the Forbes 400, told CNBC that “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 too big too fail.”

Free Trial

Proudly annoying those in power since 2000.

Sign up for a FREE 21-day trial to keep reading and get the best of Crikey straight to your inbox

By starting a free trial, you agree to accept Crikey’s terms and conditions


Leave a comment

3 thoughts on “Weill calls to break up the big ‘supermarket’ banks

  1. zut alors

    Once glass is shattered it’s nigh impossible to restore.

  2. Jeff White

    Spoken like a true investment banker, Sandy. A fee on the way in for the merger, a fee on the way out for the separation. The bankers equivalent of perpetual motion. Gotta love it.

  3. Dogs breakfast

    That leaves the question of why this wasn’t pursued in Australia.

    We had the opportunity, we had the political chance, we had Joe Hockey talking glibly about banking reform, without ever enunciating a proposal of any sorts.

    Why didn’t Swan take him on? Why didn’t we move to separate the retail from the investment banks?

    Because the banks were profitable, was the refrain from the banking industry, which is a great argument, until they aren’t.

    And when won’t they be? Well nobody knows, but that’s why you do it. Each bank has some history of nearly going to the wall in the last 30 years due to incompetent and over-reaching decisions. As it is, the banks here are just as tightly bound to the real estate market as the US banks were before the great crash, but we are still paying off our mortgages.

    But then what happens if unemployment goes to 10%, or 15%. Suddenly the real estate market is bust and the banks aren’t far behind.

    Perhaps separation won’t save them in that case, but as the govt has and will continue to guarantee the banks, there is still a good case to argue the separation. At least the govt (taxpayer) will only be bailing out the retail bank business.


Share this article with a friend

Just fill out the fields below and we'll send your friend a link to this article along with a message from you.

Your details

Your friend's details