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Dr Paul Volcker speaks on the progress in financial sector reform

04 November 2010

DIALOGUE: LKY School Dean Prof Kishore Mahbubani (left) with Dr Paul Volcker

With the unveiling of the QE2 or quantitative easing 2 by the United States Federal Reserve, the dialogue with Dr Paul Volcker, Head of US President Barack Obama's Economic Recovery Advisory Board, was timely. The former United States Federal Reserve Chairman is one of the world's most respected figures in the realm of international economics and finance. At a talk organised by the NUS Lee Kuan Yew School of Public Policy (LKY School) on 2 November 2010 in Singapore, Dr Volcker spoke on the progress in the financial sector reform and its issues and challenges.

"It doesn't alarm me that they are talking about buying more securities; it's the volume which they choose to do it in, and we don't know what that is. But it's a further effort to ease, when you've got interest rates as low as they are, you can't go much lower. So I don't look for any overpowering results of this actioning, and it does worry people that it's okay now," said Dr Volcker, who is also Chairman of the Board of Trustees of the influential Washington-based financial advisory body, the Group of Thirty and a member of the Trilateral Commission.

When asked by LKY School Dean Prof Kishore Mahbubani about President Obama's reputation as "anti-business" due to media reports, Dr Volcker said that such an interpretation was a "misconception". He noted that changes to the financial system could not happen overnight and added that following the financial crisis, the behaviour of Wall Street banks did not change.

During the recent financial crisis, Dr Volcker called for restrictions on the nation's largest banks, prohibiting deposit-taking institutions from engaging in riskier activities such as proprietary trading, private equity and hedge fund investments.

At NUS, he has been serving as a member of the Governing Board of Lee Kuan Yew School of Public Policy since 2006.

To listen to the dialogue, please click here.