Spotlight on: Paul Volcker, former chairman, Federal Reserve
Stephen Foley
Stephen Foley is Associate Business Editor of The Independent, based in New York. In a decade at the paper, he has covered personal finance, the UK stock market and the pharmaceuticals industry, and been the Business section's share tipster. And since arriving with three suitcases in Manhattan in January 2006, he has witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Tuesday 14 February 2012
Latest in Business Analysis & Features
On Facebook
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.
- 1 Mark Zuckerberg saved $111m by selling Facebook shares before stock slumped
- 2 Brazil rocked by abortion for 9-year-old rape victim
- 3 News in pictures
- 4 Tory chief Warsi failed to declare rent income from flat
- 5 In pictures: The bewildering face of China
- 6 Osborne to face questions over links to Murdoch
- 7 Is Ridley Scott the most macho man in movies?
- 8 Postgraduate students are being used as 'slave labour'
- 9 Günter Grass attacks Merkel for Athens policy
- 10 Exclusive dispatch: Assad blamed for massacre of the innocents
- 1 Brazil rocked by abortion for 9-year-old rape victim
- 2 Hardcore, hard-wired: How the prevalence of porn is changing our everyday lives
- 3 Fat? Really? Olympic hope laughs off official’s jibe – but others aren’t amused
- 4 Leading article: Ten questions for Jeremy Hunt
- 5 Is Ridley Scott the most macho man in movies?
- 6 'Hello mum, this is going to be hard for you to read ...'
- 7 Postgraduate students are being used as 'slave labour'
- 8 Exclusive dispatch: Assad blamed for massacre of the innocents
- 9 Coke reveals its secret: It may need to carry a cancer warning
- 10 French in uproar over oral sex anti-smoking posters
Experience the Heineken Hub
Get free wi-fi and exclusive i content while you enjoy a tasty pint of Heineken at participating pubs.
Can you imagine a career in teaching?
Be inspired to teach - let real teachers show you how rewarding the job can be.
Playing a game-changing role during the Games
Cisco is providing the solutions for London 2012's complex IT needs.
Enter the latest Independent competitions
Win anything from gadgets to five-star holidays on our competitions and offers page.
Business videos from commercial thought leaders
Watch the best in the business world give their insights into the world of business.
Career Services
Day In a Page
The secret life of the red carpet
Up and away – how '7 Up' went global



Comments