Volcker to Bankers: 'Wake Up, Gentlemen'

Former Fed chief blasts them on pay, 'innovation'
By Harry Kimball,  Newser Staff
Posted Dec 9, 2009 1:19 PM CST
Volcker to Bankers: 'Wake Up, Gentlemen'
Paul Volcker, chairman of the President's Economic Recovery Advisory Board, listens as President Obama makes a statement in May.   (AP Photo/Charles Dharapak)

(Newser) – Former Fed chair Paul Volcker had some harsh words for international bankers and regulators about the poor practices that led to the global financial crisis—and continue to this day. Volcker, who advises President Obama, surprised a forum in Britain with this broadside on pay: “Has there been one financial leader to say this is really excessive? Wake up, gentlemen. Your response, I can only say, has been inadequate.”

Volcker also bit in to wacky “innovation” like credit default swaps. “I wish someone would give me one shred of neutral evidence that financial innovation has led to economic growth—one shred of evidence,” he said. Another attendee, a former Salomon Brothers executive, blasted the bailout culture, reports the London Times. “There’s something wrong about large proprietary risks being taken at the risk of taxpayers," he said. "The asymmetry will not hold." (Read more Paul Volcker stories.)

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