A decade after Glass-Steagall's repeal, it's time to reverse Sandy Weill's legacy

Peter Cohan

The Glass-Steagall Act -- a law passed in 1933 that separated investment banking from commercial banking with the aim of preventing another Great Depression -- was repealed exactly 10 years ago today at the urging of Sandy Weill so that Citicorp and Travelers (TRV) could merge and from Citigroup (C).

Weill, at the time the CEO of Citicorp, got then-Treasury Secretary Robert Rubin's support for what turned out to be a disastrous regulatory change, one that was finally passed as Rubin passed the baton to his successor -- Larry Summers (now director of President Obama's National Economic Council). That's because the repeal freed Citi to combine commercial, consumer and investment banking into a one-stop shop -- and created a recipe for financial disaster.