facebook
twitter
rss
account
search
search
 

Volcker pushes for separate banks

Oct. 21, 2009 at 12:30 PM   |   Comments

| License Photo
WASHINGTON, Oct. 21 (UPI) -- Former Federal Reserve Chairman Paul Volcker said he espouses a banking system that separates commercial and investment banking.

"The guy's a giant; he's a genius; he is a great human being," Austan Goolsbee, an adviser to President Obama said. "Whenever he has advice, the administration is very interested."

But the administration is not taking Volcker's advice to separate banks into those that handle federally insured deposits and those that make risky bets on securities that threatened the financial system last fall, The New York Times reported Wednesday.

"The banks are there to serve the public and that is what they should concentrate on. These other activities create conflicts of interest. They create risks, and if you try to control the risks with supervision, that just creates friction and difficulties," Volcker said.

Volcker, 82, serves as the head of the Economic Recovery Advisory Board, but works in New York and has a presidential audience infrequently, The Times said.

He has one fan with sizable credentials. Joseph Stiglitz, a Nobel laureate in economics said returning to a system of separate banks would create "a cleaner, safer banking system."

© 2009 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Most Popular
1
Tesla could face sales ban in Michigan Tesla could face sales ban in Michigan
2
Early completion of refit of Italian aircraft carrier Early completion of refit of Italian aircraft carrier
3
Europe must drop the euro, Germany abandon mercantilism Europe must drop the euro, Germany abandon mercantilism
4
British Reaper UAVs join the fight against Islamic State British Reaper UAVs join the fight against Islamic State
5
Russia doesn't fear Azeri gas, scholar says Russia doesn't fear Azeri gas, scholar says
Trending News
Around the Web
x
Feedback