The other day, a man by the name of Sandy Weill announced on CNBC that "what we should probably do is go and split up investment banking from banking." Now, at first blush, you may wonder why this is of any significance. He's hardly the first person to suggest this idea, usually referred to as a reinstatement of the Depression era Glass-Steagall act. You may also wonder, who the hell is Sandy Weill, and why do I care?
Funny story, way back in the late 90's Citibank, a large commercial bank, was all excited about merging with Travelers Group and Salomon Brothers, which were insurance and investment institutions, respectively. This was a problem because of the aforementioned Glass-Steagall Act which barred the merging of high risk, securities firms with commercial lending banks that were expected to be safe and stable places to deposit your money. In the end they did merge and through some impressive Congressional jujitsu it was all made legal, after the fact, by repealing Glass-Steagall and voila! Citigroup was formed and became the first Too Big to Fail bank.
Wait, wait, I'm getting to the funny part! Sandy Weill . . . was CEO of Travelers Group and spearheaded the merger, after which he was CEO of Citigroup! Get it? The same idiot who ensured the creation of Too Big to Fail mega-banks is now going on THE financial news network to say that maybe, just maybe we should consider the reinstitution of the very regulations he helped repeal. It's hilarious, right?
For a more in-depth riff on the comedic stylings of Mr. Weill, I suggest this piece from Matt Taibbi.
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What hypocrisy! What does Weill gain from this? Is he dying soon? Is this repentance?
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