Paul Volcker

Paul Volcker

Paul Adolph Volcker (born September 5, 1927 in Cape May , New Jersey , † December 8, 2019 in New York City , New York ) was Chairman of the Federal Reserve System of the United States of America from August 1979 to August 1987 , after he had already headed the Federal Reserve Bank of New York from 1975 . He was chairman of the Economic Recovery Advisory Board founded by US President Barack Obama in early 2009 . On February 6, 2011, Volcker resigned from office. Volcker was director of the American Council on Germany , long-time member and former director of the Council on Foreign Relations and the Trilateral Commission .

Live and act

He was prepared for his career by studying at Princeton , Harvard University and the London School of Economics and Political Science at London University. In addition to his work at the Fed, he was a Senior Fellow at the former university since 1975 .

His career took over the Federal Reserve of New York , the Chase Manhattan Bank and the Ministry of Finance of the USA (United States Department of the Treasury) , in which it has a crucial role in the task of in the latter gold standard after the Bretton Woods system played. The phase of a policy u. a. the high interest rate is also known as the "Volcker shock".

President Carter had motivated Volcker to run for the Fed. During Volcker's tenure as Fed chairman, the period of high inflation ( stagflation ) in the United States came to an end in the late 1970s and early 1980s. However, the extraordinarily high key interest rates used (at times over 20 percent) also led to major protests, as they had a slowing effect on developments, e.g. B. the construction and agricultural sectors and led to higher unemployment. However, inflation, which had been up to 15 percent in early 1980, was brought under control. Volcker's monetary policy and the resulting recession is seen as a major factor in the defeat of incumbent Democratic President Jimmy Carter by Republican Ronald Reagan in 1980.

Paul Volcker was head of the IIC (Independent Inquiry Committee Into the UN Oil-For-Food Program ) in 2004/5 , which, as an independent institution, investigated the events of the scandal surrounding the oil-for-food program.

In addition to Austan Goolsbee , Jason Furman , Jeffrey Liebman and Robert Rubin , Volcker was also a member of Barack Obama's economic policy advisory team . Since the summer of 2008, Obama has consulted Volcker several times as an advisor on the financial crisis in the US.

He was an honorary doctor of the Finance University of the Government of the Russian Federation . In 1992 he was elected to the American Academy of Arts and Sciences and in 1998 to the American Philosophical Society .

Volcker rule

Form and content

In a speech on January 21, 2010, US President Obama announced his intention not only to regulate the big banks more strictly , but also to limit their proprietary trading activities. The Volcker rule , named after Volcker, thus adopted by President Obama states:

"Banks are not permitted to participate in hedge funds and private equity funds, to own or finance them and to conduct proprietary trading [This involves trading in financial instruments (money, securities, foreign exchange, currencies, precious metals or derivatives) which takes place in the bank's own name and for the bank's own account and is not directly triggered by a customer transaction] at one's own risk. Banks must limit their securities trading activities to customer orders and are not allowed to take risky positions for their own speculative motives. "

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

“Commercial banks in America and elsewhere are protected by a safety net, they have access to the central bank and, in most countries, a deposit guarantee scheme. The central question is whether the institutes should also enjoy support from the state, taxpayers who do speculative business for their own account. Commercial banks have an important role in economic life. You need to be protected. "

In a letter dated May 19, 2010, Volcker expressly supported the Merkley-Levin Amendment to the Dodd Bill . Merkley and Levin praised the current version of the Volcker Rule in December 2013 .

In the economic discussion

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 in recent years have mainly arisen in the non-banking sector (LTCM, investment banks, insurance companies). The most important thing, however, is to ensure uniform regulation throughout the system. Paul Krugman does not see the problem in the size of a bank, but in the fact that so-called " shadow banks" do not fall under banking supervision and regulation.

Political implementation

As the New York Times reports, Goldman Sachs is keen to see the company's current and future obstacles to trading in derivatives removed. Due to the ongoing legal proceedings, their considerable lobbying activities are publicly dismissed by the government and politicians of the ruling party.

Since July 2010 the so-called Dodd – Frank Act has forbidden banks to make risky bets for their own account. In return, limited investments in hedge funds and private equity were allowed. More precisely, the following rule applies: Investments in hedge funds and private equity are still permitted with up to three percent of the bank's core capital. The US parliament had defined the main features of the Volcker rule in the Dodd-Frank Act , but left the precise implementation to the regulators, including the SEC and the US Federal Reserve. The US authorities responsible for regulating the financial markets want to present the final version of the 2012 Volcker Rule by August 2012 by the end of 2012. The Volcker Rule is part of the Dodd-Frank Act, which the US government and Congress learned in 2010 from the 2008 financial collapse. The aim of the law is to limit the willingness to take risks in order to prevent a repetition of the financial crisis. Under the reform, the institutes are to separate their proprietary trading from business with customers' assets. This should reduce the volumes in the short-term and speculative markets. However, it is very difficult to distinguish the two business areas.

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

Individual evidence

1. ↑ Obama seeks more advice in: Frankfurter Rundschau of January 21, 2011
2. ↑ Board of Directors of the American Council on Germany ( Memento from December 15, 2012 in the Internet Archive )
3. ↑ Membership list of The Trilateral commission (PDF; 451 kB)
4. ↑ Official list of members of the Council on Foreign Relations (PDF; 588 kB)
5. ↑ Hans-Jürgen Bielung: International Political Economy. An introduction . VS Verlag, Wiesbaden 2007, p. 286 .
6. ↑ Sam Gindin, 2014
7. ^ Daniel D. Eckert: World War of the currencies . FinanzBook-Verlag, Munich 2010, ISBN 978-3-89879-595-1 , p. 67ff.
8. ↑ Cf. Ingar Solty (2008): The Obama Project: Crisis and Charismatic Rule. Hamburg: VSA
9. ↑ Member History: Paul A. Volcker. American Philosophical Society, accessed February 10, 2019 . 
10. ^ Full text: Obama on financial risk-taking. Financial Times , January 21, 2010.
11. ↑ Kevin Drawbaugh, Carol Bishopric: White House recommits to "Volcker rule" bank trade ban. Reuters, February 23, 2010.
12. ^ Edward Luce, Tom Braithwaite: 'Volcker rule' takes bankers by surprise.
13. ↑ Patrick Welter: America and the Volcker Rule: Prohibition of proprietary trading is difficult to implement . In: Frankfurter Allgemeine Zeitung , October 12, 2012. Accessed October 13, 2012. 
14. ↑ Nikolaus Piper: Restriction in securities trading - Why Volcker is right . In: Süddeutsche Zeitung , February 16, 2012. Retrieved October 13, 2012. 
15. ↑ Hans Anton Hilgers (Department WD 5, Economy and Technology, Food, Agriculture and Consumer Protection, Tourism): Current term: The Glass-Steagall Act and banking regulation (No. 05/10) (PDF; 88 kB) In: Wissenschaftlicher Dienst of the German Bundestag . German Bundestag. February 4, 2010. Retrieved December 13, 2019.
16. ↑ Volcker's interview with Manfred Schäfers: “Higher inflation targets are just nonsense.” FAZ, March 10, 2010.
17. ^ Letter from Volcker to Senators Merkley and Levin, May 19, 2010 (PDF; 62 kB)
18. ^ Greg Hitt, Damian Paletta: Senate Passes Finance Bill. The Wallstreet Journal, May 21, 2010.
19. ↑ Merkley-Levin statement on final Volcker Rule ( Memento from December 6, 2014 in the Internet Archive ) (December 10, 2013)
20. ↑ Ignazio Angeloni: La cura Volcker puo non bastare. ( Memento of July 6, 2010 in the Internet Archive ) Il Corriere della Sera , February 15, 2010.
21. ^ Paul Krugman: Financial Reform 101. The New York Times , April 2, 2010.
22. ^ Eric Lichtblau, Eric Dash: Goldman and Its Lobbyists Spurned in Finance Fight . The New York Times, April 28, 2010.
23. ^ Damian Paletta: It Has A Name: The Dodd / Frank Act. The Wallstreet Journal, June 25, 2010.
24. ↑ Damian Paletta: US Lawmakers Reach Accord on New Finance Rules. The Wallstreet Journal, June 25, 2010.
25. ↑ Zacharias Zacharakis: Prestige project: Obama's hacked financial reform . In: Financial Times Deutschland , January 21, 2011. Archived from the original on January 21, 2011. Retrieved on October 13, 2012. 
26. ^ Rolf Benders: Wall Street Regulation: US supervisors consider Volcker rule to be dangerous . In: Handelsblatt , March 5, 2012. Retrieved October 13, 2012. 
27. ↑ Volcker rule: USA takes banks away from risk-taking . In: Reuters . Handelsblatt. August 21, 2012. Retrieved October 13, 2012.
28. ↑ Louis uchitelle: Volcker Pushes for Reform, Regretting Past Silence. The New York Times, July 9, 2010.

Web links

Commons : Paul Volcker  - collection of images, videos and audio files

Wikiquote: Paul Volcker  - Quotes

• Paul Volcker in the nndb (English)