Re-enact the Glass-Steagall Act

I was really encouraged the other day when I saw an article in the Financial Times reporting that Sandy Weill, former Chairman and CEO of Citigroup commented in a CNBC interview that the big banks should be broken up and that investment banking should be separated from banking.  Hoorah!

First let me say that I have always admired Sanford Weill.  I watched his career with great interest and admiration as I read about this deal making and managerial skills in Fortune Magazine.  And here’s a man who puts his money where his mouth is.  Did you know that in those early days of Citigroup’s demise after the financial sector crashed in late 2008 that he invested more of his own money in Citigroup?  Now that’s commitment.

His comments triggered talk about that vaunted piece of US legislation – The Glass-Steagall Act.  You know the legislation that was passed after the stock market crash of 1929 and that protected our country from another financial meltdown for more than 75 years!  That was of course until a steady barrage of lobbyists from the banking and financial industries got the most stringent provisions repealed around 1995.  That’s when thinks took a major turn for the worse.

That’s when Allen Greenspan thought and commented that the financial markets could regulate themselves.  Hello!  We all see where that kind of thinking has landed us.

So, I’m taking this occasion to call on all Americans to write to their congressmen and ask that the major provisions of the Glass-Steagall Act be re-enacted.  Separate the commercial banks from the investment banks, separate the insurance companies from the investment companies.  Put up the walls between these different entities so this type of financial disaster never happens again.

Read more about Sandy Weill’s comments here:

Also here: