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Forget the politics, says former Morgan Stanley CEO Phil Purcell, the best reason to break up...

Forget the politics, says former Morgan Stanley CEO Phil Purcell, the best reason to break up the big banks is to benefit their shareholders. "Breaking these companies into separate businesses would double to triple the shareholder value of each institution." Strong words from a man who spent his career putting these behemoths together.
Comments (6)
  • Good to know that a FORMER CEO wants to break up a bank.
    26 Jun 2012, 08:09 AM Reply Like
  • Let's generate more fees........for the banks,attorneys, political' s.......shareholders follow the rabbit!
    26 Jun 2012, 08:14 AM Reply Like
  • Wouldn't breaking up a TBTF bank now require the bank to show us the other side of the ledger. I'm afraid that this could lead to "the emperor has no clothes" moment.
    26 Jun 2012, 10:55 AM Reply Like
  • The last time I broke up a bank - the pennies went all over the floor. I don't know if I found them all. Did some get lost?
    26 Jun 2012, 11:29 AM Reply Like
  • Simplistic. There are many financial products- payments, savings, forex, pensions, insurance. A good financial group will be in all of these activities which are profitable and where it can have a strong market position. And try to be a one-stop bank for its customers. And know its customers personally and listen to them. Perhaps I agree that banks should stop being so big that they have no clue who their customers are, much less how to trust and help them. Back to the days of middle-sized banks??
    26 Jun 2012, 02:54 PM Reply Like
  • Phil Purcell didn't contribute to the big diversified financial institution trend. He was head of Dean, Witter when Morgan Stanley bought that firm, but they were both investment banks to begin with. Mr. Purcell was always a very conservative banker, which ended up getting him tossed from Morgan Stanley in 2005 because shareholders wanted the firm to take more risk, especially in the very hot CDO space.

     

    There was a highly public campaign to achieve this end, including a full page ad in the WSJ signed by a large number of major shareholders and (former) directors of the company. If Phil could have held on a couple more years, his approach would have been fully vindicated, as it was, Morgan Stanley ended up on the verge of failure under the leadership of John Mack, who was greated with applause on his first day upon stepping on to the Morgan Stanley trading floor. Unfortunetly, I must admit I applauded the move at the time as well; a lesson learned. Phil probably was a little too conservative and let many good opportunities go because of it, but the end result of leadership would have seen the firm in a better position today.
    30 Jul 2012, 01:23 PM Reply Like
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