Whoops - there goes the Market Monday
REUTERS
Fri Feb 20, 2009 7:39pm GMT
Volcker says this could be worse than the Great Depression
Former Federal Reserve chair and current presidential adviser Paul Volcker says that the global economy may be deteriorating even more precipitously than it did during the Great Depression.
"I don't remember any time, maybe even in the Great Depression, when
things went down quite so fast, quite so uniformly around the world,"
he said at a Columbia University luncheon. He also dismissed the notion
that the financial innovation of the past decade has had any positive
results: "There is little correlation between sophistication of a
banking system and productivity growth."
Volcker
believes that greater regulation of institutions large enough to post
systemic risk is necessary, and also wants to see a move toward more
uniform accounting standards -- a step that is hard to argue with and
probably should have happened a long time ago, regardless of the recent
meltdown.
It's just a shame that more people weren't talking about these
problems -- innovation without a purpose other than self-enrichment,
opaque accounting and large banks operating as glorified hedge funds --
before they destroyed the world.
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