Of Special Interest
- Financial wellness affects half of peoples’ mental or physical health, finds report
- Study finds traditional financial institutions embrace Fintech disruption
- Grass is greener for environmentally friendly businesses, finds Barclays
- Prospective homeowners would consider a 40-year mortgage to escape renting, finds Santander
- Millennials’ needs are changing the face of banking industry, says new report
- FS is putting consumer data at risk by failing to protect mobile apps, says Arxan
- A lack of belief in their ability holds 28% women back in work, says Cambridge & Counties
- ‘Which?’ reveals Scotland has lost over a third of its bank branches in eight years
- Next downturn unlikely to be as bad as 2008, according to S&P
- FCA reveals findings from first cryptoassets consumer research
- US consumers favour single mobile app for banking and payments
- Banks suffering major IT shutdowns every day, ‘Which?’ reveals
- The US will be a key offshore centre in 2019, says GlobalData
- Debit industry changes markedly in 10 years of the Debit Issuer Study
- UK's ‘Big Five’ face ‘too big to compete’ as small challengers secure stellar returns
- Banks as vulnerable now as before crash, says new study
- Leverage ratio a constant conundrum for European and US banks, says SNL
27th July 2012
Sandy Weill : Bring back Glass Steagall
Sandy Weill suggested in a television interview that investment banking should be split from retail banking. The news has caused a stir because he is often described as the man who persuaded the US government to repeal the Glass-Steagall Act, which previously enforced this split.
In 1998 Weill who had built Travelers Group into a major group wanted to merge it with Citicorp in order to form Citigroup. To achieve this he is credited with persuading the government to repeal Glass Steagall. Weill argued in the interview that the argument for a split now was not because the action in the 1990s was wrong but instead due to the change in the global banking markets since that time.
Citigroup eventually received around $476bn of state aid, though this occurred long after Weill had left the bank. It was the recent misstep of JPMorgan Chase, that reinforced the resolve of the US government to introduce tough new banking regulation after considerable wavering on the subject. JPMorgan Chase is run by Jamie Dimon who was the favoured lieutenant of Weill at the time of the Travellers / Citi merger. The Volcker rule bans major principle trading by deposit taking banks except in special circumstances.
The Volcker rule has evolved from a simple idea to a complex rule taking 300 pages to explain the rules. Many feel this will be too complex to work effectively leading to calls for the more simple idea of Glass Steagall to be reintroduced.