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Reed Apologizes for Glass Steagall Repeal, Building Citigroup
Bob Ivry
Bloomberg
Friday, Nov 6th, 2009
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’m sorry,” Reed, 70, said in an interview
yesterday. “These are people I love and care about. You
could imagine emotionally it’s not easy to see what’s
happened.”
Citigroup was formed in 1998 when Citicorp, a commercial bank,
combined with Sanford I. Weill’s Travelers Group Inc.,
which owned the investment firm Salomon Smith Barney Holdings
Inc. The New York-based company lost $27.7 billion in 2008 and
took $118 billion in writedowns. Now 34 percent-owned by the
Treasury Department, Citigroup sought help in the wake of a
credit freeze that claimed three of Wall Street’s biggest
firms and led to the deepest recession in 70 years.
Congress’ overhaul of U.S. financial regulations should
include ordering banks to hold more capital, ensuring executives’
compensation is aligned with long-term profitability and banning
firms that take deposits from also engaging in equities and
fixed-income trading, Reed said.
Full
article here
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