The Banker Most Responsible for Allowing the Too Big to Fail Banks Says We Must Break Them Up

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Every independent economist and financial expert says that failing to break up the giant banks is ruining the American economy.

Former Fed chairmen Greenspan and Volcker agree, as do presidents of various Federal Reserve banks and high-level Treasury officials, and the "central banks' central bank.

But now even the banker most responsible for the creation of the too big to fails - former Citi boss Sandy Weill, who lobbied vigorously for a repeal of the Glass-Steagall act separating real banking from financial gambling - has called for them to be broken up:

What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail ...

I’m suggesting that [the big banks] be broken up so that the taxpayer will never be at risk, the depositors won’t be at risk, the leverage of the banks will be something reasonable, and the investment banks can do trading, they’re not subject to a Volker rule, they can make some mistakes, but they’ll have everything that clears with each other every single night so they can be marked-to-market ...

This [too big to fail] system is really immobilizing the banking system:

All of a sudden, the powers-that-be are starting to challenge Tim Geithner for his defense of too big to fail banks.

For example, a reporter on CNBC asked Geithner about Weill's statement:

And as Business Insider notes:

Congressmen on The Hill questioning Tim Geithnerhad a new song to sing — 'let's take a look at Glass-Steagall', a law repealed during the Clinton Administration that separated investment banking from retail banking.

The crazy thing is, this song was coming from both sides of the aisle.

Representative Carolyn Maloney (D-NY) mentioned Weill's comment in her opening statement to Geithner and that got the ball rolling. She said that his words were "absolutely huge," and asked Geithner to write a report on how 2008 could have been prevented had Glass-Steagall been enacted at the time.

After that, member after member picked up the torch.

Representative Walter Jones (R-NC) said that he regretted two votes during his time as a Congressman — the Iraq War and repealing Glass-Steagall. "Isn't it time to have a discussion and debate about reinstating Glass-Steagall," he asked.

Michael Capuano (D-MA), a fiery member of this committee to be sure, said "funny how people who voted to repeal Glass-Steagall are now complaining that banks are too big."

Again on the Republican side, New Mexico's Steve Pearce started his questioning of Geithner by saying that he wanted to add his voice to Maloney's when it came to getting a report on how Glass-Steagall would've made things different in 2008. He then asked Geithner, "why should the people of New Mexico trust you or your policies?"