Last summer former Chairman and CEO of Citigroup Sandy Weill shocked the world when
he advocated breaking up Wall Street banks.
He is, after all, the godfather of the “supermarket” one-stop-shop JP Morgan style bank model, and one of the people that pushed to get rid of Glass-Steagall.
In other words, he knows what he’s talking about here.
This morning Weill says he didn’t get much of a pushback from bankers for his comments for two reasons — firstly because bankers have felt rage from the rest of the country, and secondly because regulation still hasn’t been put in place.
“Nobody knows what the rules of the road are going to be,” he said, adding that everyone likes to know where they’re going and the regulations we are trying to put in place don’t clarify that.
So does Weill still think banks should be broken up, asked Becky Quick.
“If the way the regulations come down do not allow entrepreneurship… do not allow people in the financial industry to make mistakes… because of risking taxpayer money I think that’s going to make our financial institutions completely ineffective,” Weill responded.
Now, exactly how Weill wants to fix these problems seems murky. He told the Squawk crew he doesn’t like Dodd-Frank (lots of pages, very small print) and he wants U.S. banks to stay competitive. A Weill regulation would focus more on leverage ratios, leveraged assets, and capital requirements.
Weill also added that we don’t actually need to bring back Glass-Steagall if we have the right regulation for big banks.
Is that a walk-back? Maybe a tiny step.