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| Citigroups Sanford I. Weill |
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 mark-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.
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.
Note:
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