TOO BIG TO FAIL – NOT ANYMORE ==> FORMER CITIGROUP CHAIRMAN & CEO (SANFORD “SANDY” WEILL) CALLS FOR BREAKING UP TOO-BIG-TO-FAIL BANKS! EUREKA!!

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The former Chairman and CEO of Citigroup, Sanford (“Sandy”) Weill remarked on CNBC that we should split up investment banking from banking.  Wow!  This coming from the same guy who turned Citi into one of the largest banks in the world.  In 1998 he oversaw the largest merger in history involving the Travelers Group and Citibank.

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Bless Me Lord For I Have Sinned, Mea Culpa, Mea Culpa, Mea Maxima Culpa!  Or as the refrain goes from that classic hymn – “Amazing Grace” – “I once was lost but now am found, Was blind, but now I see”.

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As stunning as the above is it does have a precedent, albeit 6 months ago, in the Annual Report for 2011 compiled by the Federal Reserve Bank of Dallas.  In that report the Dallas Federal Reserve Bank President, Richard W. Fisher, called for precisely the same thing.  See down below for some “telling” statistics that came out of that report that clearly show the condition we face today with regard to our over-consolidated banking system.

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2011 ANNUAL REPORT

FEDERAL RESERVE BANK OF DALLAS

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Dallas Federal Reserve President Richard W. Fisher compiled this report.  He states therein that the ultimate solution to this nation’s banking  situation is to break up the Too-Big-To-Fail Banks.

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The report reveals that the top 10 banks now account for 61 percent of commercial banking assets, well more than just 26 percent only 20 years ago and their combined assets are equal to half of the nation’s GDP.

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The following are statistics that show the difference in the banking system as it was in the 1970’s and as it existed in 2010.

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1970

12,500 smaller banks – controlled 46% of total industry assets

Top 5 banks – controlled 17%      ”    ”    ”    ”    ”   ”   “

95 large and medium-sized – controlled 37%    ”    ”    ” 

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2010

5,700 smaller banks – controlled 16% of total industry assets

Top 5 banks  –  controlled 52%     ”    ”   ”    ”    ”    ”    “

95 large and medium-sized – controlled 32%      ”   ”    “

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The report goes on to state that commercial banks holding roughly one-third of the total assets of the banking system failed, surviving only with extraordinary government assistance.

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Sandy Weill and Richard Fisher are “heavyweights”.  The Occupy Wall Street movement might have dispersed but it went a long way toward “nudging” some individuals in positions of power to dare to state publicly what most of us think anyway.  Kudos for these two individuals.

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Now we need some courageous souls in the halls of Congress.  Maybe we as a society can have another Jimmy Stewart/”Mr. Smith Goes To Washington” & “It’s A Wonderful Life” moment to combat the monopolistic control of the “Mr. Potter” banks of this nation.  Maybe.  

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To me, it feels like everything in this country is moving at a “crawl” because of the logjam inherent in our current mega-banking system.  Until we massively “loosen” up the flow of capital in our economic system by downsizing our mightiest banks we are in for a long period of stagnancy – a generation’s worth at least.

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PETE/MARIN
(Remember, We Ride So You Don’t Have To!)
https://paulrevererides.wordpress.com