Spotlight on: Paul Volcker, former chairman, Federal Reserve

He of Volcker Rule fame?

Fame? You mean infamy. Not a day goes by without someone piling on to criticise the Volcker Rule, which bans US banks from "proprietary trading", that is, speculating with their own money.

Why is he a fan?

Now aged 84, Volcker cultivates the too-old-to-care air of a man telling time-worn truths to smart-asses half his age. He championed the ban on prop trading as by far the simplest way to cut banks down to size and cut the risk of them going belly up.

What do the critics say?

That in practice it is impossible to define prop trading precisely. Mr Volcker just shrugged at that one. "It's like pornography," he said. "You know it when you see it".

So is the rule going to get implemented?

By July, though the details are still in flux. Regulators are trying to pin down definitions now, and there was a deadline for public comments yesterday. Banks and their lobbyists have thrown in multiple objections, and so have foreign governments, the UK included. They fear it will create a less liquid market for government debt, raising borrowing costs.

How is Mr Volcker taking the criticism?

Water off a duck's back, you would have thought, for the man who used sky-high interest rates to quell inflation when he ran the Fed in the Eighties, despite howls from the public.

Water off a duck's back, except...

Except that he has had enough of all the carping and penned a public letter attacking the critics. They are missing the huge benefits of the rule: an end to conflicts of interest at banks, and getting bankers back focused on their clients, instead of on big bets that they hope will net them a big bonus.

So he has come out swinging?

Yes. It is, after all, about his legacy.

Independent Comment
blog comments powered by Disqus
Career Services

Day In a Page

Patrick Cockburn: I fear this terrible massacre will be the beginning of a long civil war in Syria

Patrick Cockburn

I fear this terrible massacre will be the beginning of a long civil war in Syria
Hardeep Singh Kohli: For me, it is all about 'Gregory's Girl', a record of first love

Hardeep Singh Kohli

For me, it is all about 'Gregory's Girl', a record of first love
Christian Louboutin: 'I don't think comfort equals happiness'

Christian Louboutin interview

'I don't think comfort equals happiness'
Happy birthday, Hotel Babylon!

Happy birthday, Hotel Babylon!

Hollywood's home to the A-list celebrates 100 years of discreet luxury
Rupert Cornwell: Low-rise capital could finally reach for the sky

Rupert Cornwell: Out of America

Low-rise capital could finally reach for the sky
The secret life of the red carpet

The secret life of the red carpet

As Cannes reaches its climax with the Palme d'Or and the celebrities gather in London for the Baftas tonight, Kate Youde and Jack Dean investigate the real star of the show
It's not easy being Professor Green: The rapper, the heiress and a drama made in Chelsea...

It's not easy being Professor Green

The rapper, the heiress and a drama made in Chelsea...
Hardcore, hard-wired: How the prevalence of porn is changing our everyday lives

How porn is changing our lives

It's everywhere - from pop videos to fashion magazines to the theatrical stage.
River Phoenix: the final reel

River Phoenix: the final reel

Twenty years after the actor's death, his last film is to be released
Facebook: The shares shenanigans

Facebook: The shares shenanigans

Investors are crying foul over the huge losses they incurred when the social network site floated on the stock market last week
Up and away – how '7 Up' went global

Up and away – how '7 Up' went global

As the last episode of Britain's '56 Up' airs, the first episode of '28 Up', from the former USSR, starts. Then there's the US, Japan, Germany...
You'll soon pick this up: Tuck into Bill Granger's fresh street food

Tuck into Bill Granger's fresh street food

It provides perfect party fare for some fun in the sun...
All to play for: How is Ukraine shaping up ahead of Euro 2012?

How is Ukraine shaping up ahead of Euro 2012?

Peter Popham casts his eye over the state of the Euro 2012 co-host ahead of the tournament.
Red or not, here they come: Artists reimagine the iconic telephone booth

BT ArtBoxes: Red or not, here they come

Artists reimagine the iconic telephone booth...
The Last Word: Premier bullies devise youth system bound to end in tears

The Last Word

Premier bullies devise youth system bound to end in tears