> > Rubin was (a) the reason Citi could merge with Salomon before
> > Glass-Steagall repeal - which (b) allowed key investment banking clients
> > of Salomon's (like Enron) benefit from using Citi's balance sheet for
> > receiving loans. Even, if he physically wasn't there when the contracts
> > were signed, he was certainly there in spirit.
>
> Nomi, could you elaborate on both (a) and (b)? They both sound juicy but
> just slightly beyond my grasp.
>
>
a) The Glass Steagall act of 1934 created a barrier between a financial institution that provided commercial (loan and deposit) banking with investment (raising money through the bond and stock markets, and mergers and acquisitions). It was repealled by Gramm-Leach-Bliley in 11/99 (just around the time Rubin joined Citi)
b) Robert Rubin was Treasury Secretary from 95-99. During his time in office, congress approved the '97 merger of Travelers (Sandy Weill's company which also controlled Salomon Smith Barney) and Citibank even though it was directly counter to the Glass Steagall- to create what ultimately became called Citigroup. So, even before 11/99, this entity could both underwrite bonds for companies like Enron and provide them with loans to expand. -------------- next part -------------- An HTML attachment was scrubbed... URL: <../attachments/20020725/ace34474/attachment.htm>