Former Citi CEO admits: Big bank model doesn't work. Repeal of Glass-Steagall was wrong.

[pa28]

Former Citigroup CEO: Big banks don't work
http://money.cnn.com/2015/11/12/investing/citigroup-john-reed-glass-steagall/

In an op-ed published in the Financial Times, John Reed says large banks like the one he used to run are now "inherently unstable and unworkable."

The man who was one of the chief architects of the "Big Bank" model now says the United States never should have repealed the Glass-Steagall banking act in 1999.

That's exactly what Democratic presidential hopefuls Bernie Sanders and Martin O'Malley have been arguing on the campaign trail. They want the law reinstated. Hillary Clinton and the Republican candidates do not.

Here is more from the complete OP-ED which can be seen here.

As I have reflected about the years since 1999, I think the lessons of Glass-Steagall and its repeal suggest that the universal banking model is inherently unstable and unworkable. No amount of restructuring, management change or regulation is ever likely to change that.

Breaking up the big banks by reinstating Glass-Steagall or something close to it is not a right/left issue. It is simply good public policy for those living outside of Wall Street. It's supported across the political spectrum from left wing economist Joseph Stigletz to right wing opinion magazines like the Weekly Standard.

Why is it framed in some political circles as a pet issue of the radical left that doesn't really matter?

[cantbeserious]

1. Yes - Validates HRC Is Wrong For America - Bernie Is Right For America

eom

[SoLeftIAmRight]

12. YES YES YES

...

[SmittynMo]

14. I will make sure this is discussed

at tonight's local event in St. Louis.

[Rex]

2. Well this won't sit well with Third Wayers.

Even though it comes from the horses mouth.

[LiberalArkie]

3. This reads very good I think, correct me it I am wrong as as I am trying for a drug induced stupor.

[mmonk]

4. Because they always frame the debate in this country.

[jwirr]

5. [phone]

[FlatBaroque]

6. He is WRONG. Hillary told me the problem was "shadow banking"

someone needs to check this dude and set him straight

[Ed Suspicious]

9. For God's sake! Somebody tell him to cut it out!

[pa28]

11. The Bank of England just re-instituted Glass-Steagall type measure for SOME reason.

http://www.bankofengland.co.uk/pra/Pages/supervision/structuralreform/default.aspx

The changes are intended to ensure that ring-fenced bodies (RFBs) are protected from shocks that originate in the rest of their banking group or the financial system in order to minimise disruption to the continuity of the provision of core services.

I keep hearing that instituting similar rules in the US will cause the financial industry to flee to greener pastures. Politicians who represent Wall Street are running out of excuses.

[Doctor_J]

7. president Hillary isn't that much different from president Bush

I don't see any way out of the mess we're in

[Octafish]

8. Complicates wealth management

Competitive nature of capitalism. Since the repeal of Glass-Steagal, UBS, Phil Gramm, Bill Clintonand George W Bush among others now can specialize in all kinds of Wealth Management:

http://financialservicesinc.ubs.com/revitalizingamerica/SenatorPhilGramm.html

[1norcal]

10. Great Catch

Great catch Octafish, If that doesn't read like a rogues gallery I don't know what does...

[think]

13. That makes two Citigroup CEOs to admit repealing Glass Steagall was wrong

Reed's U-turn on Glass-Steagall comes after another former Citigroup CEO and chairman Sandy Weill did the same in 2012.

Weill suggested that big banks be broken up "so that the taxpayer will never be at risk," in an interview with CNBC.

http://money.cnn.com/2015/11/12/investing/citigroup-john-reed-glass-steagall/

[erronis]

16. Is it just me, or is something fishy going on here? They must have another special deal,

Perhaps reached with the help of the current administration and the expected coronation.

Or, perhaps they have already "got theirs" and want to stop other future pirates from clambering on board the Good Ship Lollipop.

[Enthusiast]

21. It's fishy.

[pa28]

23. I don't think it's anything fishy. People get candid when they move out of the system.

JMHO.

[SoapBox]

15. Cut it out!

Ya, that's a great plan.

[pa28]

19. Sensible Democrats agree. Politely telling banks to cut it out will send a strong message!

That message being we'll have your back during the next meltdown, bail you out and say "NOBODY could have predicted this".

[edhopper]

17. The problem is

assholes on the right will keep saying the whole collapse in 2008 was all because of Fanny Mae and nothing to do with G/S being repealed.

I have even had discussions here where people refuse to accept that the repeal of G/S was a major factor.

[Hydra]

22. Most of the people disagreeing have an agenda or never saw what was happening

I had an interesting experience over a decade ago that showed me- I tried to get a job with what I found out later was Primerica. I did the training and saw what they were doing, and saw what the deregulation allowed them to house under one roof. As the franchise owner put it, "You know the story of David and Goliath? Well, we're the Goliath. You'll stand with the biggest player behind you if you are with us."

Not knowing economics or pretty much anything else relevant to that at the time, I still had a funny feeling about what that meant. Who was watching over a power that great?

[AZ Progressive]

18. Bernie was right on many things that Hillary was wrong...

What does that say about who should lead our country?

[Enthusiast]

20. Kicked and recommended!