Don’t Fall For Sandy Weill’s Crocodile Tears

The remarkably ironic pronouncement from Sandy Weill that the U.S. should resurrect some form of the Glass-Steagall Act - which he worked assiduously to tear asunder in the 1990s as he created Citigroup - has touched off another a debate about how to control the worst instincts on Wall Street.

Bloomberg contributor Willam Cohan writes that 'there is no question that bankers, traders and executives need help reining themselves in. After all, it was their collective actions that brought us the financial crisis in 2007 and - as if nothing had been learned about irresponsible behavior - the current scandals about manipulating the London interbank offered rate, the $6bn loss on an ill-advised proprietary bet by a handful of traders at JPMorgan and the accusations of money-laundering at HSBC.

Now, of course, Wall Street’s highly paid lawyers and lobbyists are working overtime to rewrite the regulations mandated by the Dodd-Frank law. It’s enough to make you wonder if the industry, which has been the envy of the world and the engine for much of the growth and innovation in the U.S. economy, has a screw loose and is on a path to self-immolation.

Among others, James Surowiecki, the New Yorker’s financial columnist, has wondered what could be done. When it comes to manipulating Libor, he suggested, the answer is simple enough: Make it harder for banks to game the system. 'Then we need to admit that fraud is a crime and throw some people in jail', he wrote'.

Hit the link below to access the complete Bloomberg article:

Don’t Fall For Sandy Weill’s Crocodile Tears