Here’s an informative account of Sandy Weill’s creation of the first full-service superbank, Citigroup, and the repeal of the Glass-Steagall Act that stood in his way .
This is from a report by Frontline that discusses the end of Glass Steagal and interviews of former SEC Chairman Arthur Levitt, former Federal Reserve Board member Alan Blinder, New York State Attorney General Eliot Spitzer, financial historian Charles Geisst, the Precusor Group’s Scott Cleland, and Kenneth Guenther of the Independent Community Bankers of America.
Excerpt: Arthur Levitt, SEC chairman from 1993 to 2001:
“It was apparent to me that the protections of Glass-Steagall had already largely eroded. But Congress, at several times, nearly passed a bill to do away with Glass-Steagall. It was clear that it was a question not of whether but when Glass-Steagall would go. Millions of dollars were pouring in the campaign coffers of senators and congressmen who were set to do this.”
Excerpt: Kenneth Guenther, President and CEO, Independent Community Bankers of America:
“We are talking about the largest financial merger in the world…for the first time in the modern history of the United States, since 1933, the largest bank, one of the largest securities firms, one of the largest insurance firms, being put together under common ownership. Here you have the leadership — Sandy Weill of Travelers and John Reed of Citicorp — saying, “Look, the Congress isn’t moving fast enough. Let’s do it on our own.” And so…they get the blessing of the chairman of the Federal Reserve system in early April, when legislation is pending…And they pulled this off with the blessings of the president of the United States, President Clinton; the chairman of the Federal Reserve system, Alan Greenspan; and the secretary of the treasury, Robert Rubin.And then, when it’s all over, what happens? The secretary of the treasury becomes the vice chairman of the emerging Citigroup.”