Dean
11th April 2011, 23:09
Glass-Steagall: Dead for 2 Decades and Counting (http://thethinred.blogspot.com/2011/04/glass-steagall-dead-for-2-decades-and.html)
Painstakingly researched, guys. Always surprised at how many persistent empires you find contemporary links to in historical research.
In 1996, Greenspan gave the Federal Reserve Board the green light to change the practices governing commercial bank holding companies. Under Glass-Steagall, they could only invest up to 5% in investment banks (due to the added risk). Greenspan quickly doubled this limit twice: first to 10%, and then to 25%. 8 months later, another decision opened the doors to insurance underwriting, allowing Traver's (under the management of Sandy Weill, who had already unsuccessfully tried to acquire JP Morgan) to acquire Solomon Brothers. Less than a year later, Traveler's merged with Citicorp.1
Enter the beast: a bank which merged securities underwriting, insurance underwriting and commercial banking - precisely the amalgamation which ushered in the banking instability of the early 1900s - only this time, the publicians had a new motto: too big to fail. Perhaps more ominous is the name itself though: Citicorp, now Citigroup Inc., was once known as National City Bank, variously administered by James Stillman (who managed the bank in his retirement via discrete courier), Charles E Mitchell (touted in 1933: "Mitchell more than any 50 men is responsible for this stock crash" -Carter Glass).2 Mitchell was also on the board of directors for American IG Farben3 (a pharmaceuticals combine which produced Zyclon B for the Nazis), which cartelized with Standard Oil New Jersey with the help of a 30 Million bond from National City Bank.2,4
...
Weill called Robert Rubin, then Treasury Secretary, to inform him of his plans to merge Salomon-Smith Barney and Citicorp - a deal being held up by stubborn Glass-Steagall provisions. Rubin Quipped to Weill, "you're buying the government." A year later, Glass-Steagall was finally repealed under Gramm-Leach-Bliley. 2 days later, perhaps as a show of confidence in the new "owners of the government," Robert Rubin left the Treasury to take an executive position under Weill.
Painstakingly researched, guys. Always surprised at how many persistent empires you find contemporary links to in historical research.
In 1996, Greenspan gave the Federal Reserve Board the green light to change the practices governing commercial bank holding companies. Under Glass-Steagall, they could only invest up to 5% in investment banks (due to the added risk). Greenspan quickly doubled this limit twice: first to 10%, and then to 25%. 8 months later, another decision opened the doors to insurance underwriting, allowing Traver's (under the management of Sandy Weill, who had already unsuccessfully tried to acquire JP Morgan) to acquire Solomon Brothers. Less than a year later, Traveler's merged with Citicorp.1
Enter the beast: a bank which merged securities underwriting, insurance underwriting and commercial banking - precisely the amalgamation which ushered in the banking instability of the early 1900s - only this time, the publicians had a new motto: too big to fail. Perhaps more ominous is the name itself though: Citicorp, now Citigroup Inc., was once known as National City Bank, variously administered by James Stillman (who managed the bank in his retirement via discrete courier), Charles E Mitchell (touted in 1933: "Mitchell more than any 50 men is responsible for this stock crash" -Carter Glass).2 Mitchell was also on the board of directors for American IG Farben3 (a pharmaceuticals combine which produced Zyclon B for the Nazis), which cartelized with Standard Oil New Jersey with the help of a 30 Million bond from National City Bank.2,4
...
Weill called Robert Rubin, then Treasury Secretary, to inform him of his plans to merge Salomon-Smith Barney and Citicorp - a deal being held up by stubborn Glass-Steagall provisions. Rubin Quipped to Weill, "you're buying the government." A year later, Glass-Steagall was finally repealed under Gramm-Leach-Bliley. 2 days later, perhaps as a show of confidence in the new "owners of the government," Robert Rubin left the Treasury to take an executive position under Weill.