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Sandy Weill Calls for Return of Glass-Steagall: No, you are not dreaming, and this is not a parody from The Onion. This is real. In a CNBC interview this morning, the architect of Citigroup says, “What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars,
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Bad Service, Good Investment? Dick Bove, the provocative bank stock analyst, is making headlines again, this time for observing that customer service has a cost, one that he’s concluded outweighs the benefits to shareholders. Frustrated by his treatment as a Wells Fargo customer, he moved his money, but he still likes the stock. From the bottom-line perspective, Bove tells the Times, “Spending time solving problems with people is not selling products. … It’s wasting time.” The implications of this are sobering, and undermine what we thought we learned in Econ 101. As Bove says, “One of the core beliefs you have about any company is that the quality of their product is the determinant of the company’s financial success. … It doesn’t work here.”
Beach Reading: Treasury Secretary Timothy Geithner said in a television interview that he’s “
Fed Kremlinology: In previews of next week’s Federal Open Market Committee meeting, the
Regulatory Misses: The Bank of England knew about the risks being taken by JPMorgan’s London traders more than a year before they produced big losses, but didn’t alert other regulators, the Journal reports. Meanwhile, the Times reports that the unfolding global, industrywide Libor-rigging scandal has once again put the New York Fed on the defensive, several months after the regulator had to explain itself in the JPMorgan mess.
Financial Times
Goldman Sachs’ bank subsidiary has more than doubled its deposit base since late 2008, to $57 billion at the end of June, with considerable help from