Volcker Warns Top Bankers They've "Been Inadequate"

Former Federal Reserve chairman Paul Volcker decided to set straight a group of top-ranking bankers at a conference held yesterday in the UK. The bankers, concerned that new regulation could constrain future financial innovation, were shut down by a “clearly irritated” Volcker.

According to the Times Online:

“…he criticised them for failing to grasp the magnitude of the financial crisis and belittled their suggested reforms … for their failure to acknowledge a problem with personal rewards and questioned their claims for financial innovation.

“On the subject of pay, he said: ‘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 went on to say:

“I wish someone would give me one shred of neutral evidence that financial innovation has led to economic growth — one shred of evidence…”

Read more about the intense outburst by the Economic Recovery Advisory Board chairman in the Times’ coverage of the Future of Finance Initiative event.

The Daily Reckoning