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Dr Paul Volcker shares insights on current financial crisis

11 November 2011

Dr Volcker gave his views on the European debt crisis

Dr Volcker at the dialogue session moderated by Prof Mahbubani

Photo Credits: Sir Michael Culme-Seymour
Former Chairman of the US Federal Reserve Dr Paul Volcker shared insights on the current financial crisis at a dialogue organised by the Lee Kuan Yew School of Public Policy (LKY School), NUS on 9 November 2011.

Dr Volcker, who was also the Chairman of US President's Economic Recovery Advisory Board, fielded questions on global financial issues from the audience, which included academics and private sector leaders. The session was moderated by Dean of the LKY School Prof Kishore Mahbubani.

When asked about his views on the European debt crisis by Prof Mahbubani, Dr Volcker outlined three solutions. He stressed the need for bank recapitalisation, to provide loans to European nations which are debt-ridden such as Spain and Italy, as well as absolve some banks from having to repay the debt.

"They have the resources in Europe to get it done. Or they go to the rest of the world for funds. The rest of the world has a big stake in this. Europe as a whole can manage it, but can it manage it? They all have their own political problems," said Dr Volcker.

He also discussed about the Volcker rule which he proposed so as to restrict American banks from proprietary trading, whereby deposits are used to trade on the bank's personal accounts. The rule is expected to be implemented in July 2012 as part of the Dodd-Frank financial reform bill. Dr Volcker said that lobbying by the financial industry made the proposed regulation much more complex than it needed to be.

Last November, Dr Volcker was in Singapore also for an LKY School dialogue session where he spoke on progress in the financial sector reform and its issues and challenges.

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