Break up the big banks, says former Citigroup CEO Sandy Weill

Credit: indybay.org

In extraordinary news, one of those who help create our megabanks, Sandy Weill of Citigroup, now says they should be split into investment bank and banking units. Sandy Weill created Citigroup as we know it today. As their CEO he lobbied hard in 1998 for the repeal of the Glass-Steagall Act which mandated that deposit banks be separate from investment banks. But he has now come full circle and is, in effect, calling for Glass-Steagall to be re-instituted.

More about breaking up the banks at my article on IVN.

Obama proposes strong new restrictions on banks

Obama essentially seeks to return to rules, repealed in 1999, that prevented bank holding companies from owning both commercial banks and Wall Street investment firms.

Obama essentially is proposing return to the Glass-Steagall restrictions enacted after the Great Depression, which separated commercial banks and investment banks.

If so and implemented, this is great news. What I’m unclear on is how it becomes regulation and if Obama will stand and fight against the expected onslaught from the investment banks.

Newsweek

After ignoring Big Paul [Volcker] for a year, Obama finally listened. The result is the end of Wall Street as we know it.

That is not hyperbole. But there’s been so many compromises from Obama over the past year, let’s see if he actually does it.