Former Citi Boss: Reduce Leverage to 15 Times Assets, Put EVERYTHING Back on the Books, and Mark All Assets to Market EVERY DAY

Financial Titan Repudiates Geithner and Bernanke’s Entire Financial Strategy

It is – justifiably – big news that former Citi CEO Sandy Weill said that we should break up the big banks, and separate traditional depository banking from speculative investing.  Indeed, even congress members are confronting top government officials on why they haven’t done this.

But Weill said 3 other equally important things today.

First, Weill told CNBC that the financial crisis was largely caused by too much leverage, and that we should reduce leverage to between 12-15 times. (Background.)

Secondly, Weill said that we have to restore transparency, so that nothing is hidden off balance sheet.  (Leading economist Anna Schwartz told the Wall Street journal in 2008:  “The Fed … has gone about as if the problem is a shortage of liquidity. That is not the basic problem. The basic problem for the markets is that [uncertainty] that the balance sheets of financial firms are credible.”)

Third, Weill argued that all assets must be marked to market every day.   (Background here and here.)

Mr. Weill’s suggestions would go a long way toward fixing our broken financial system and giving us a shot at prospering once again.

Note: We are obviously not defending Weill’s horrific past actions, and he failed to mention prosecuting fraud, which is perhaps the most important action we can take to help the economy recover. And we believe that bonuses and ill-gotten gains should be clawed back from every Wall Streeter who committed fraud.

However, we take our allies where we find them. And on the points he raised today, Mr. Weill’ is on the same side of the fence as all of the top independent economists and financial experts.

This entry was posted in Business / Economics, Politics / World News. Bookmark the permalink.
  • blankman

    Him saying this crap is part of the scam, it’s people like his last act so we all get a warm fuzy in our pants, hearing a dickhead affirm logic doesn’t mean anything.

    • robertsgt40

      Correct! “Leveraging 15 times”. The greed and lust for money is still in him. A debt based Ponzi can never be uprighted without abolishing the Fed and going back to honest currency(metals backed) He’s made his bundle. When do folks think he “got religion”? Just before the house of cards collapses. He can then say,”Hey, I told you how to fix it”

  • Wooten Berston

    Are not the assets of criminal ventures subject to forfeiture? Does not the fact that these bankers and pseudo-bankers colluded in a criminal venture make them all subject to the so-called RICO provisions?

  • Harry Johnson

    He should also be subject to prosecution along with his cronies.