Coyoty (coyoty) wrote,

It's all Citicorp's fault!

According to financial advisor Brian P. Beck, the current financial crisis is due to Citicorp's merger with Hartford's Travelers Insurance.  When the president of Citicorp, Sandy Weill, wanted to merge the company with Travelers 11 years ago, it was forbidden by the Glass-Steagall Act of 1933 because it had been determined after the Great Depression that a key cause of that crisis was the monopoly of banks that had merged with insurance companies.  Instead of diversifying Citicorp enough to qualify for a merger under Glass-Steagall, Weill got the law repealed in 1999 with the help of his friend Robert Rubin, then Treasury Secretary, who later resigned to work for Citicorp.  The repeal allowed banks to engage in risky business such as junk mortgages and merging with radically different companies, and moving assets between them with no accountability for actual value, leading to the current situation.

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