NEW YORK Nov 12 Kenneth Griffin, founder of
hedge fund Citadel LLC, said Tuesday that he supported breaking
up the largest U.S. banks.
"If I could wave a magic wand, I'd break up the banking
system," Griffin said in an interview at a DealBook conference
shown on CNBC television.
He said that the complexity and size of banks has created
regulatory, compliance and management challenges and has hurt
competition. He said, however, that he did not support the
Occupy Wall Street movement since many of its demands are not
"grounded in reality."
Griffin said that he would remove the securities businesses
from banks such as Goldman Sachs and Morgan Stanley
and develop more mid-size banks to improve competition.
Griffin also said that the number of insider trading cases
successfully brought against Wall Street firms, including the
case against Steven A. Cohen's SAC Capital Advisors hedge fund,
"has put a bit of a dark cloud over the entire industry."
"I think it's unfortunate that the culture there allowed not
one rotten apple but a couple of rotten apples," Griffin said on
SAC. SAC pleaded guilty to fraud charges on Nov. 8 as part of a
$1.2 billion deal to resolve an insider trading investigation.
Griffin also said that the U.S. Federal Reserve's $85
billion in monthly bond-buying stimulus has been "very
successful" at inflating the prices of financial assets, but
that it is not clear whether the benefits of the program have
compensated for the costs.
"We need to reduce both the reality and perception of the
Fed's intervention in long-term rates," he said. "I think that
will do more to help real economic growth than most other things
the Fed could do right now."