We’re going way back for this one:
“With an aggressive legal maneuver, Citicorp is taking another step in the battle to unshackle the banking industry from the restraints of the Glass-Steagall Act of 1933. The strategy, being watched closely by the entire banking industry, has been used for years to push the deregulation of the financial industry: Explore every loophole in existing law to do what you want to do. As they have in the past, the House and Senate are watching, rather than legislating, as the industry and its regulators make changes that will reshape the financial landscape…
In a securities deal announced last week, Citicorp, the bank holding company, said it was issuing $47 million of mortgage-backed securities through its Citibank Delaware Inc. subsidiary. The move was aimed at avoiding – some say circumventing – a Federal court order that would have blocked the New York-based Citibank from issuing securities backed by residential mortgages originated by the bank.
-New York Times, March 23, 1989
Would someone please tell me why the Taxpayers are on the hook to bailout these cretins?
Hat tip: Bill King
Talking Deals; Citicorp Strategy On Glass-Steagall
NYT, March 23, 1989