Weill, Builder of Bank Supermarkets, Calls For Their Breakup
Sanford Weill, the financial tycoon who pioneered the modern U.S. megabank that mixes deposit taking and lending with riskier investment banking activities, called for the model to be dissolved in an interview televised on Wednesday.
In remarks that may betray concern about his legacy in financial history, Weill told CNBC that big banks should be split into commercial banks and investment banks.
"I think what we should probably do is go and split up investment banking from banking," he said. "Have banks make commercial loans and real estate loans. And have banks do something that is not going to risk the taxpayer dollars, that is not going to be too big to fail."
Weill, who is known as Sandy, said he had come to this view over the past year as he watched public opinion turn against bankers.
"Our world hates bankers," he said. "There is such a feeling among people, among regulators, among the political system all over the world against the banking system, and I don't think that is going to change so soon."
Weill's comments come more than a decade after he convinced the U.S. Congress to dissolve the Depression-era Glass-Steagall Act that prohibited deposit-taking banks from engaging in riskier investment banking and securities trading activities.
"I've never had more respect for Sandy than after hearing this," said his former business partner, Arthur Levitt, who also served as chairman of the Securities and Exchange Commission. "It's a very difficult statement for him to make since he was largely responsible for the repeal of Glass-Steagall, and he's absolutely right. This is a very significant statement."
(Reporting by Jed Horowitz and David Henry in New York; Editing by Lisa Von Ahn and Bernadette Baum)
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