Answer to quiz: Some of you got it right – Sanford Weill, former CEO and chairman of Citigroup – selling his Greenwich mansion for $14 million. The underlying issue isn’t Weill’s wealth or even his conspicuous consumption. It’s that his persistent lobbying in the late 1990s shattered Glass-Steagall, the law that separated commercial from investment banking and limited the investing risks banks could take. Weill then turned Citigroup into one of the largest gamblers on the Street, and profited handsomely. The Street’s rival banks followed Citi’s lead, making them all too big to fail and causing the government to spend hundreds of billions of dollars to keep them afloat. The biggest problem bank was Weills Citigroup, requiring $45 billion of taxpayer money to fix it. (Years later Weill recanted and called for Glass-Steagall to be resurrected but by then it was too late to undo the damage, and he had already retired with his fortune intact.)
Posted on: Mon, 21 Apr 2014 02:35:55 +0000
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