The combination of Citicorp, the world's largest issuer of credit cards and Travelers, which owns brokerage house Solomon Smith Barney and several insurance concerns, would be the largest corporate merger ever. Reed and Weil would serve as co-CEOs of the new company, to be called CitiGroup. Here's John Reed. There are also regulatory issues. Federal law dating back to the depression era prohibits commercial banks from owning investment banks.
More recent regulations forbid commercial banks from getting into the insurance business.
There is a loophole. Again, Larry Cohn. The regulators have the opportunity to extend the ownership opportunity for about three more years after that. What Citi and Travelers are betting is that sometime in the next two to five years, Congress will finally pass financial modernization legislation. Federal reserve chairman Allan Greenspan was consulted.