Walter B. Wriston, who died last week at 85, left distinctive marks that can still be seen on the company he led - and the banking industry - more than 20 years after he retired from Citicorp.
It is nearly impossible to find a regulator or executive who did not disagree with Mr. Wriston on one point or another during his career as chief executive of Citi, from 1967 to 1984, and yet he is universally admired, even by those he fought hardest against.
In fact, though Citi has been led by two legendary bankers since - John Reed and Sandy Weill - Mr. Wriston is the man many credit with forcing the changes needed to keep the bank a step ahead of rivals in the financial services business.
Mr. Wriston relentlessly pursued deregulation, pressing regulators and legislators to roll back rules he saw as impediments to profits. He opened the doors to interstate banking, large bank holding companies, and diversification beyond staid commercial lending into businesses such as investment management and credit cards. He circumvented state usury laws by creating a federally chartered bank in South Dakota and embraced consumer banking as the counterweight to Citi's sprawling international and corporate businesses.
His impact was felt long after his retirement, as Citicorp raised the heat on regulators in 1998. That was the year Citi merged with the brokerage and insurance conglomerate Travelers Group and forced a repeal one year later of the Glass-Steagall Act's restrictions on combining banking with securities..
Though his endorsement of the ATM is often mentioned as a career highlight, bankers said an esoteric product known as the negotiable CD, introduced in 1961 before he became CEO, was perhaps Mr. Wriston's most transformational contribution to the industry.
Banks were constrained in the interest they could pay on deposits, so corporate customers had increasingly turned to the money markets. Negotiable CDs were large-denomination, interest-bearing deposits that could be traded on a secondary market, meaning that a corporation that bought one and wanted to cash out a few days later could simply sell it. This allowed banks to compete for corporate and institutional deposits and gave them an opportunity to manage the liability side of their balance sheets in addition to the asset side.
"That changed the way we all did business," says John F. McGillicuddy, who was the president of Manufacturers Hanover Corp. in the 1970s and its CEO from 1979 to 1991.
"People forget the straightjackets we were under in those days," Mr. McGillicuddy said Friday. "Clearly he was the signal force of change."
Many differ on which contemporary banker best matches Mr. Wriston, but they agreed the torchbearer would need the courage to push the industry - and regulators - to the edge.
Former Comptroller of the Currency Eugene Ludwig says Hugh L. McColl Jr., the former Bank of America Corp. chief executive, may be one such candidate. Another former comptroller, John D. Hawke Jr., said J.P. Morgan Chase & Co.'s James Dimon shares the same progressive foresight.
Several people credit Mr. Wriston's prolonged fight with regulators for eventually hatching the Gramm-Leach-Bliley Act of 1999, which shattered the Depression-era divisions between commercial and investment banking. "He was one of the few bankers at the time that had a very broad concept of the direction that banking was going," said Peter Wallison, a former general counsel to the Treasury Department and President Ronald Reagan, who recalled Mr. Wriston's clashes on the issue with then-Federal Reserve Board Chairman Paul Volcker.
Robert L. Clarke, another former comptroller, said Mr. Wriston was "a very progressive guy who believed that banks ought to be able to be in services that banks weren't in at the time."
"All of what banking is doing today would fit in with his philosophy - the idea that banks are much more broadly involved in the economy and are expanding internationally," Mr. Clarke said. "It's a product of Walter Wriston's vision. It is everyone else who is trying to catch up with that, including the securities business."
The black mark on Mr. Wriston's career was the accumulated effect of aggressive lending to Latin American countries on the premise that countries "don't go bankrupt."
E. Gerald Corrigan, a former CEO of the Federal Reserve Bank of New York and the special assistant to Mr. Volcker in the late 1970s and early '80s, said: "Walt did push the envelope. Walt had what could be called a casual attitude with respect to the importance of capital. It was his conviction that the capacity of the business model to produce revenues and profits was so powerful that it could sustain the volatility of the business model. The fact of the matter is that wasn't always sufficient."
Though Mr. Wriston's beliefs about the importance of capital occasionally got him in hot water, several observers said he would have encouraged the regulatory capital changes known as Basel II because it aims to give banks more control.
"In the early days in his reign at Citi, capital was basically whatever the examiner said it should be," Mr. Hawke said. "There were no formulaic rules. Of course when Citi was going through its problems with its foreign exposures, people thought they had run out of real capital. Today, particularly with Basel II coming on, you have a very different environment in terms of supervision of capital."
Citi already had a long history in the international banking circles when Mr. Wriston took over, but at home there were still barriers keeping banks from branching across state lines. He took aim at those regulations and offered consumers such conveniences as longer branch hours and a funky invention called the automated teller machine.
"If he hadn't gone after consumers, I'm sure someone else would have," said H. Rodgin Cohen, the chairman of Sullivan & Cromwell, a New York law firm. "But perhaps consumers would have gone in a different direction - a reinvigorated thrift industry or consumer finance firms."
Last year's frenzy to open retail branches and otherwise boost consumer businesses "is perhaps the best testament to his impact on the consumer banking business," Mr. Cohen said.
Bankers recall that despite his tenacity as a competitor, Mr. Wriston spoke quietly, with a gentlemanly demeanor. He could be brutally sarcastic, but "after he retired, I would still run into him occasionally and he was always unbelievably generous," Mr. Corrigan said Friday. "He would go out of his way to come across the room and say hello. That's a side not everyone knows about."
