THE MAN who turned Citigroup into a banking megalith said yesterday he now thinks such large institutions should be broken up in order to regain the public’s trust.
Sandy Weill, who steered Citicorp into an $70bn merger with Travelers in 1998, told CNBC: “I think what we should probably do is go and split up investment banking from banking.
“Have banks make commercial loans and real estate loans. And have banks do something that is not going to risk the taxpayer dollars, that is not going to be too big to fail.”
His comments represent a remarkable volte face, given his key role in Citicorp’s merger, which forced the US to repeal the Glass-Steagall Act – the law requiring investment banks to be separate from retail banks following the 1930s Depression. Weill, who served as Citi’s chairman until 2006, said public opinion needs to be addressed in the wake of the financial crisis. Citi received a $45bn bailout in 2008.
“Our world hates bankers,” he said.