Ex-Citigroup CEO Sandy Weill “just wants to move on”

May 9, 2012 by · Leave a Comment
Filed under: Opinion 

Forbes has an interesting interview with the former top boss at Citigroup.  You can read through the interview yourself and make up your own mind.   There are a few quotes I would like to respond to directly to give you my opinion on the matter.   Frankly, I thank Mr. Weill for not softening the corners and giving it to us straight as to his opinion on of global financial crisis

Quote #1 (with question)

How do you think America’s biggest banks have recovered from the financial crisis?

I think the banks are in very good shape right now. I don’t like the new financial regulations. What bothers me the most is I think that banks could be controlled or managed by having good regulations and by having more transparency. I think this whole concept of fixing ‘too big to fail’ is a problem because when you create an environment where you can’t make a mistake then you’re also creating an environment where nothing good is going to happen.

My Response:

A mistake is different then taking obviously junk residential real estate loans (sub-prime), getting insurance (CDS) from companies without the capital to back up losses, calling it AAA, selling it to anyone who would buy it.   Yes there were major mistakes made in this process but even in the policy makers put the perverse incentives in place, the banks had a responsibility as the guardian of capital to not be reckless and to use the old adage, “when the music plays, dance.”

Quote #2 (with question)

But a lot of Americans blame lax regulations and the big banks for the financial crisis. What would you say to them?

I would say there is enough blame to go around. I think that the financial industry made some mistakes that created issues, our government made mistakes that created issues, the regulators made mistakes that created issues. People made mistakes that created issues.

Lots of people were at fault. I think we want to move on. There comes a time when you stop punishing people and ask how do we build this back in a way that’s going to be safer for the future? We should concentrate on the future and positive thinking.

My Response:

I agree with the last part on having a future bias and positive thinking.   BUT  To say we need to “stop punishing people” would only make sense if we were actually punishing people.  Think to yourself  after the largest financial crisis in the history of the planet, who has been punished that had a major influence on the crisis while it was building up???  Not only have we not punished much of anyone, all the major banks have settle out of courts without guilt on pretty much textbook fraud and or misrepresentations.   We also have drug our feet so long that the statue of limitations have run out on many of these potential cases.  Mr. Weill, don’t worry, we have moved on technically.  After the S&L crisis have read about of at least 700 people (conservative estimate) that went to jail because of that fraud.

Here it the full interview, post comments to weigh in to agree or not and I will approve them so we can see where people stand on these opinions.

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