For the U.S. banking industry, the big news on Wednesday was former Citigroup (C - Get Report) chairman Sanford "Sandy" Weill's early morning interview on CNBC. Weill -- who led the 1998 merger of Travelers Group and Citicorp to form Citigroup, creating the "financial supermarket" business model for the largest U.S. banks, including JPMorgan Chase (JPM - Get Report) and Bank of America (BAC) -- dropped a bombshell by saying that the United States should "go and split up investment banking from banking."
Weill said that "the financial crisis "was created by too much concentration in investments in the banking system, way too much leverage,
Separating investment banking from deposit gathering and lending would meant that "the taxpayer will never be at risk, the depositors won't be at risk, the leverage of the banks will be something reasonable, and the investment banks can do trading... not subject to a Volcker rule," Weill said, adding that investment banks could then escape the current regulatory burden and "be creative, they can make some mistakes, they'll have everything
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