In an interview with Bloomberg’s Bob Ivry, John S. Reed, who helped engineer the merger that created Citigroup Inc., apologized for his role in building a company that has taken $45 billion in direct U.S. aid and said banks that big should be divided into separate parts:
“I would compartmentalize the industry for the same reason you compartmentalize ships,” Reed said in the interview in his office on Park Avenue in New York. “If you have a leak, the leak doesn’t spread and sink the whole vessel. So generally speaking you’d have consumer banking separate from trading bonds and equity.”
That’s all very nice but that’s not enough for me. Especially when he goes on and tries to find excuses:
“We learn from our mistakes,” said Reed, who wrote an Oct. 21 letter to the editor of the New York Times endorsing a division of banking activities. “When you’re running a company, you do what you think is right for the stockholders. Right now I’m looking at this as a citizen.”
Bullshit! The regulations that Reed and his peers lobbied so hard to dismantle in the 90’s were put in place because … “we” had learned from the mistakes that caused the 1929 crash. In other words, “we” knew but guys payed themselves millions to be ignorant. Go bleep yourself.
The only way you and your peers are going to get some chance of pardon from me, and millions of other people across the world, is if you actively work to propose workable solutions to rein in the beast international finance has become. You have the knowledge, which means you could, but you still have to prove you really want to reform the system.
By reforming the system I mean reforming the working practices, not simply downsizing the biggest companies and separating activities, because this wouldn’t keep the financial sector from being way to large with respect to the other sectors of the economy. As long as the financial sector is allowed tactics such as naked short-selling (which is down right fraud since it involves buying/selling something that doesn’t exist while claiming it does exist) it will continue to drain investments from the rest of the economy by being a paradise of easy money for the greedy.