Volcker Blames Recession on Trade Imbalances; Wants Stiffer Regulation of Institutions

The Washington Times (Washington, DC), February 5, 2009 | Go to article overview

Volcker Blames Recession on Trade Imbalances; Wants Stiffer Regulation of Institutions


Byline: David M. Dickson, THE WASHINGTON TIMES

Paul Volcker, former chairman of the Federal Reserve and an economic adviser to President Obama, told a congressional committee Wednesday that massive trade-related imbalances in the U.S. economy were the source of the financial crisis that has produced an ugly recession.

Mr. Volcker then urged Congress to enact long-term financial-market reforms by increasing regulation of large financial institutions that could undermine the entire economy if they failed.

Some banks are not only too big to fail, Mr. Volcker said. Some are too big to exist.

Senate Banking, Housing and Urban Affairs Committee Chairman Christopher J. Dodd, Connecticut Democrat, asked Mr. Volcker to assess the source of risk in the current crisis.

Go back to the imbalances in the economy, Mr. Volcker replied. The United States has been consuming more than it has been producing for many years.

The result was a collapse in personal and government savings and an explosion of the trade deficit. America's lack of savings was replaced by a flood of financial capital from abroad. Those inflows generated low long-term interest rates, which helped home prices to soar.

When housing prices stopped rising, the fragility of the financial system was exposed, Mr. Volcker said.

Mr. Volcker testified on behalf of the Group of 30, which includes financial experts from private and public sectors around the world.

Citing a recent G30 report, Mr. Volcker called for greater transparency and the registration of large hedge funds with a national regulator, which should have authority to establish standards for capital, liquidity and risk management. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Volcker Blames Recession on Trade Imbalances; Wants Stiffer Regulation of Institutions
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.