2

Father of big banking Sandy Weill changes tune

Sanford I. Weill speaks at a news conference March 20, 2002, in Tokyo, Japan. Weill, who engineered Citigroup and the creation of megabanks, says big banks should be split up. Will the debate now gain traction?

Stacey Vanek Smith: Sanford Weill was once a big name on Wall Street -- and the king of making big banks bigger. Back in 1998, he combined Travelers, the insurance company, with Citibank to create Citigroup. But now Weill wants to break up big banks.

Marketplace's Heidi Moore has that story.


Heidi Moore: Sandy Weill was the man who had the vision for the modern megabank. He was like the Dr. Frankenstein of banking.

"Frankenstein": It's alive, it's alive!

Back then, the megabank looked like a great advancement. But as banks got bigger, and bigger, and then too big to fail, they helped cause the worldwide financial crisis. So, after 2008, the megabank monster was being chased by torch-wielding mobs.

John Reed, who created Citigroup with Weill, expressed regret over the idea of megabanks on TV a few months ago.

John Reed: It turns out to have been something that -- the word 'disaster' is maybe strong enough.

That's a sentiment shared by another former big-bank CEO, the former chair of the FDIC, and the president of the Dallas Federal Reserve.

Dennis Kelleher: His progeny -- I don't know what you want to call it -- his creation did not turn out the way that he had hoped.

That's Dennis Kelleher, the CEO of advocacy group Better Markets. He hopes that Weill's change of heart influences other bankers.

Kelleher: My first thought was: game changer. Instead of the arrogance and whining and entitlement these people have shown, they might want to start reflecting.

When a village elder like Weill speaks, perhaps Wall Street will listen.

In New York, I'm Heidi Moore for Marketplace.

About the author

Heidi N. Moore is The Guardian's U.S. finance and economics editor. She was formerly the New York bureau chief and Wall Street correspondent for Marketplace.
Log in to post2 Comments

Kudos to Weill, I guess. But remember, Dodd Frank was passed to end TBTF banks. It's been over a year and so far DF has done very little if anything to achieve that goal. Ditto for one of DF's other goals of "ending bailouts." DF has been effective in scrambling the egg of interchange (swipe) fees as part of its goal to "protect consumers from abusive practices." However, that "progress" has benefitted only retailers by way of a huge windfall while bank customers lose card perks and discover new fee-maginative charges on their monthly statement.

In the Preamble for DF:
The stated aim of the legislation is:

To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end "too big to fail", to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.

Well, well, well. The man is a little slow on the uptake, isn't he? How much does this guy make?

With Generous Support From...