As almost every banker around the world knows, Paul Volcker is living proof that, long past an ex-Fed chairman’s usual sell-by date, an octagenarian banker can maintain his relevancy.
In a series of speeches in London on Thursday, Volcker reiterated the case for new capital rules and barring deposit-taking banks from most investment banking activities, the so-called “Volcker role”.
He may actually find a more receptive audience in the new, ruling Conservative-Lib Dem coalition than the previous Labour government, as John Gapper notes in his blog on Friday.
Then in another speech, he gave his rather bleak prognosis on the outlook for the eurozone, warning of a potential disintegration of the euro, and weighed in on the need for cross-border rules for dismantling failing banks.
Volcker described himself as a “believer in the euro”, but said that sustaining the single currency would require “changes in the structure of European economic policy”. However, his warning that the eurozone could break up as a result of the Greek fiscal crisis and resulting near-$1,000bn bail-out package reverberated through market reports on Friday.
But with decades of practice, Volcker also knows when to shut up.
As Bloomberg noted, he declined to elaborate on what European governments should do as he left Mansion House, the official residence of the lord mayor of London’s financial district, after giving a speech there and crossed the street to visit the Bank of England.
“That is up to European governments,” he said. “The nature of the problem does not lend itself to one-word sound bites.”
Related links:
Volcker owns Wall Street’s bankers - The New Republic
Transcript: Interview with Paul Volcker – FT.com