Matt Taibbi: When Did Sandy Weill Change His Mind About Too Big To Fail? And Why?
from Rolling Stone:
When Did Sandy Weill Change His Mind About Too Big To Fail? And Why?
POSTED: August 3, 11:30 AM ET
There were a great many fascinating moments in the now-legendary Squawk Box interview of former Citigroup chairman Sandy Weill, in which the creator of the Too-Big-To-Fail model told an astonished Andrew Ross Sorkin that it was time to break up the Too-Big-To-Fail banks. But one moment in particular flew under the radar:
SORKIN: But did this come to you in 2008, 2009, was there a conversation you had with someone, because this is a true revolution.
WEILL: Change. You know I think it is something Ive been thinking about a lot over the last year and I wanted to really get my thoughts together before I said anything. But I think good things are simple and I think what Im saying is very simple.
For the moment we can ignore the fact that Weill throughout the interview kept patting himself on the back for his "good thing" of an idea. (Although, if close attention is paid, one does get the impression that Weill sincerely believes he came up with the "break up the banks" idea on his own, and its almost like hes preparing to take credit for it if it happens; this is just one of the many layers of delicious comedy that can be peeled back through careful re-examination of this interview). We can just call all that background noise for now.
Instead, lets just focus on the "when" question Sorkin raised. Because interestingly enough, Weill addressed this very issue at the close of the year Sorkin mentioned, 2009.
It was back then that Weills former co-C.E.O. at Citi, John Reed, paved the way for Weills future conversion by issuing his own mea culpa on the issue of Too-Big-To-Fail. Reed wrote a letter to the New York Times on October 22, 2009 calling for the same division of commercial banks and investment banks, saying the repeal of the Glass-Steagall Act, which had kept those companies separate, was a mistake. ................(more)
The complete piece is at:
http://www.rollingstone.com/politics/blogs/taibblog/when-did-sandy-weill-change-his-mind-about-too-big-to-fail-and-why-20120803#ixzz22XMBWX5S