Paul Volcker

Paul Adolph Volcker ( born September 5, 1927 in Cape May, New Jersey) was from August 1979 to August 1987 Chairman ( Chairman ) of the Federal Reserve System of the United States of America after 1975 already at the Federal Reserve Bank of New York had projected. He was chairman of the company founded in early 2009 Economic Recovery Advisory Board to the U.S. President Barack Obama. On February 6, 2011 Volcker resigned. Volcker is director of the American Council on Germany, a longtime member and former director of the Council on Foreign Relations and the Trilateral Commission.

Life and work

In Volcker's term as Fed chairman ending the high inflation period in the United States fell ( stagflation ) in the late 1970s, early 80s. The extraordinarily high interest rates it used ( at times over 20 percent), however, led to major protests, as they had braking influence on the development such as the construction and agricultural sectors and led to higher unemployment. Inflation, which stood at the beginning of 1980 up to 15 percent, but could be brought under control. Volcker's monetary policy and the recession caused thereby will be considered as an essential factor in the defeat of the incumbent Democratic President Jimmy Carter to Republican Ronald Reagan in 1980.

His previous career took over the Federal Reserve of New York, Chase Manhattan Bank and the U.S. Treasury ( "United States Department of the Treasury " ), where he, in the latter a crucial role in the abandonment of the gold standard after the Bretton Woods system played.

He was prepared for his career including through studies at Princeton, Harvard University and the London School of Economics and Political Science, London University. In addition to his tenure at the Fed, he was at the former University since 1975 Senior Fellow.

Paul Volcker was 2004/5 Director of the IIC (Independent Inquiry Committee Into the UN Oil -For- Food Programme ), which is oil -for-food program examined by the independent institution as the operations of the scandal.

Austan Goolsbee addition, Jason Furman, Jeffrey Liebman and Robert Rubin, Volcker today is also part of economic policy advisory board of Barack Obama. Since summer 2008, Obama Volcker moved several times as a consultant in relation to the financial crisis in the United States for help.

He holds honorary doctorates from the University of Finance Government of the Russian Federation.

Volcker Rule

Form and content

In a speech of 21 January 2010, U.S. President Obama has announced his intention to regulate the big banks not only stronger, but also to limit their proprietary trading activity. The thus inherited by President Obama, named after Volcker Volcker rule states:

Banks are not allowed on hedge funds and private equity funds to contribute to possess them or to fund and proprietary trading shops [ This is to trade in financial instruments ( cash, securities, foreign exchange, varieties, precious metals and derivatives), the in- as well as for its own account the bank at name and is not triggered directly by a customer business ] to make at your own risk. Banks must limit their (securities ) trading activities on sales orders and may even enter into any risky positions from their own speculative motives.

Paul Volcker said on March 8, 2010 in an interview with the FAZ ( Frankfurter Allgemeine Zeitung):

" Commercial banks in America and other countries are protected by a safety net that they have access to the central bank and in most countries to a deposit guarantee scheme. The central question is whether the institutions should enjoy support from the state, the taxpayers, at their own invoice speculative transactions make. commercial banks have an important role in the economy. , you need to be protected. "

In a letter of 19 May 2010, Volcker has explicitly supported the Merkley - Levin amendment to the so-called Dodd Bill. Merkley and Levin praised in December 2013, the current version of the Volcker Rule.

In the economic debate

The economist Ignazio Angeloni argues that the Volcker rule is neither necessary nor sufficient to eliminate the financial risks in the banking sector. The risks of recent years were mainly in the non-banking sector ( LTCM, investment banks, insurance companies) emerged. It is, however, most importantly, to provide a system- continuous uniform regulation. Paul Krugman does not see the size of a bank the problem, but the fact that so-called not fall " shadow banks " under the banking supervision and banking regulation.

George Soros supports the discussion in the U.S. Senate plans that would force banks to separate the derivatives business from its other activities.

Political implementation

As the New York Times reported, Goldman Sachs is interested that the current and future disabilities of their company be lifted with respect to the derivatives trading. Due to the ongoing legal proceedings their considerable lobbying activities by government and politicians of the ruling party will be publicly rejected.

The new so-called " Dodd- Frank Act " prohibits banks to complete on their own account risky bets. In turn, limited facilities were granted in hedge funds and private equity investments. More specifically, the following rules apply: With up to three percent of the core capital of the bank investments in hedge funds and private equity are further allowed. The U.S. Congress had the Broad Volcker rule defined in Regulation Act Dodd- Frank Act, but the exact implementation left to the regulators to which the Securities and Exchange Commission and the U.S. Federal Reserve belong. The authorities responsible for the regulation of financial markets, U.S. authorities want to present the final version of the Volcker Rule 2012 as of August 2012 until the end of 2012. The Volcker Rule is part of the Dodd-Frank law, which have pulled out of the collapse of the financial sector in 2008, the U.S. government and Congress 2010, the teachings. Objective of the law is to limit the risk-taking in order to prevent a repeat of the financial crisis. Under the reform, the institutions should separate their proprietary trading from the business with assets from customers. Thus, the volumes should be reduced to the short-term and speculative markets. It is however very difficult to distinguish the two divisions.

Volcker himself is not convinced that the new law goes far enough to prevent another banking crisis.