How high does it take for a person to hallucinate…105, 106? Could that explain why in a recent CNBC interview Weill called for the break-up of the big banks? The so called, “too-big-to-fail” banks.
His call is not extraordinary in itself (many happen to agree with it). The noteworthy part is that Sandy Weill was the father of the “bank supermarket” model. As CEO of Citigroup in the late 1990s he was the principal architect of the effort to allow banks to be the one stop shop for consumer and commercial finance. He recruited Gerald Ford and Robert Rubin to join his crusade and in less than two years paved the way for Citibank (and many others) to become retail lender, commercial lender, brokerage business, credit-card provider, insurance outfit, and investment bank, all wrapped up into one. In effect he created the “too-big-to-fail” global banking super-center.
Lots of people are speculating on Weill’s motivation to call for this 180 degree turnabout from the model for which he gets most of the credit. Some say it’s vintage Sandy, who ten years after retirement is longing to make headlines again. Others say it took courage for the guy to reverse course and that he truly believes the model doesn’t fit today’s business climate. The best explanation was from “Ace” Greenberg, former head of Bear Stearns. Greenberg thinks Sandy Weill didn’t actually make those comments but rather it was Sacha Baron Cohen (Borat) in a Sandy Weill disguise on CNBC.
It doesn’t much matter what Weill’s motivation is. There is something to be said for a financial world where community banking is once again built on relationships, investment banks limit their reach to dealings on Wall St. vs. Main St., and Insurance companies prudently manage risk and make money the old fashioned way, one policy holder at a time.
Hey Sandy, check the thermometer. Maybe it reads 98.6 after all.
