Watching the tape (below), you see Weill on the set, talking normal big-shot talk, about how great and important American banks are and all that. He veers into some interesting areas, the importance of keeping leverage under control, putting derivatives on exchange, not allowing stuff off balance sheet—all good, surprisingly lefty, actually, but nothing wildly unexpected. And it turns out to be throat-clearing. Quick is about to ask another question, and Weill, clearly a man with a plan, raises a finger and preses ahead, dropping the bomb in the middle of a soliloquy:
What I think mostly is there is such a feeling among people, among regulators, among the political system all over the world against the banking system and i don’t think that’s going to change so soon. So I think what we should probably do (pause) is go and split up investment banking from banking, have banks be deposit takers, have banks maybe commerce loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not going to be too big to fail. If they want to hedge what they’re doing in their investments, let them do it in a way that it can be mark-to-market so they’re not going to be hit and have a creative system where the financial industry can again attract the best and brightest young people like think-the-do in silicon valley and like they’re doing in engineering so that we can lead innovation that’s necessary and entrepreneurship that’s necessary….
I know it’s obviously news, and the implications were plain, but Quick and Sorkin have to do it in real time. They give him every chance to walk it back.
Quick: That’s a pretty radical idea, breaking up investment banks and banks. Are you suggesting going back and really breaking these companies up?
Weill: That’s exactly what I’m suggesting.
Quick here suppresses an inchoate sound that I take to be the equivalent of, “holy f@king sh!t,” but moves on smoothly to the next obvious question, “The question becomes Glass-Steagall. You’re almost referring to bring Glass-Steagall in some respects.” Sorkin then asks, wait, what about the financial supermarket, which is the next right question, and the interview proceeds from there.
I’m thinking it wasn’t as easy as they made it look, particularly at that hour of the morning.
Watch it here: