Sanford Weill, the former CEO of Citigroup, suggested that banks should be broken up to separate retail from investment banking. If any single person is responsible for Wall Street banks becoming too big to fail it’s Sandy Weill.
In 1998 he created the financial powerhouse Citigroup, combining Traveler’s Insurance and Citibank. Weill then successfully lobbied the Clinton administration to repeal the Glass-Steagall Act, a law that separated commercial from investment banking. And he hired Bob Rubin, then Clinton’s Secretary of the Treasury, to oversee his new empire. Weill created the business model that Wall Street uses to this day — unleashing traders to make big, risky bets with other peoples’ money that deliver gigantic bonuses when they turn out well and cost taxpayers dearly when they don’t. And Weill made a fortune – as did all the other executives and traders. JPMorgan and Bank of America soon followed Weill’s example and their bonus pools exploded as well.
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