In 1999 this 1933 Act was repealed and this allowed a single bank holding company to expand its scope of activities to include retail and investment banking along with other insurance and other allied interests, thereby removing the firewall that previously existed between investment banking and commercial banking. The former boss of Citigroup, Stanford Weill was credited with being one of the key lobbyists for the repeal of this Act. Weill was the architect of Citigroup following the merger of Travelers Insurance Company and Citibank in 1998 when Alan Greenspan granted a waiver from this legislation. Recent history has taught us all that it was the removal of this firewall that led to the current global banking crisis and the billions of dollars required to bail them out, which in turn has led to many governments in Europe having to then manage their debt crises. So it is of great interest to note that following the revelations that 16 London banks flagrantly manipulated the benchmark London Interbank Offered Rate (LIBOR) that fourteen years later Weill is now calling for the restoration of the Glass-Steagall legislation. This should not be a debate solely in the United States. There should be a global push to break up the so-called ‘big banks’ and restore some sanity to the banking industry.
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