Ken Griffin, one of America's best-known hedge fund investors, has a radical idea: Break up big banks, and restore competition and transparency to the financial services industry.
The head of Citadel Capital came out swinging at his own industry in a rare public interview at The New York Times' DealBook Conference on Tuesday.
America's banks have become not just too big to fail, but too big to manage, Griffin told Andrew Ross Sorkin. The first wave of the wand would be to separate securities trading businesses from banking businesses, reducing the kind of systemic risk that led to the financial crisis.
"They got it right in the Great Depression," he said. The Glass-Steagall Act "actually makes a tremendous amount of sense. It is not appropriate for the securities trading industry in our country to [receive] the taxpayer support implicit in the FDIC-insured companies."
This is not likely to be a popular position with his peers. But, Griffin said, "watching the populist anger toward all the financial services over the last couple of years makes me wonder why more people that sit closer to where I sit don't want to put themselves outside of the taxpayer support position they are in today."
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