As Citigroup's Chairman and CEO Sanford Weill invented the modern bank as the one-stop shop where people could handle all their various financial needs. Now, in an interview on CNBC's Squawk Box this morning he called for breaking up those big banks:
“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.”This would mean, effectively, a return to the days of Glass-Stegall.
In addition to calling for the break-up of the banks, Weill also called for greater transparency in the banking industry:
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.The impact that this has going forward remains to be seen. However, the fact remains that the person who pioneered our modern big banks, and helped create the system that spawned "too big to fail" has now come out in favor of ending that system. If we needed one last piece of evidence that the big bank system doesn't work — a coup de grâce, so to speak — Sandy Weill might have just delivered it.