Volcker returns

Obama Volcker.jpgSometimes, a picture is worth 1000 words. That’s the case with this photo (used by most of the world’s major news media), showing President Obama with former US Fed Governor Paul Volcker by his side.

Volcker’s re-emergence is the first real sign of a serious shift in policy towards the financial sector. And the blog is thoroughly delighted with his return. It summarised Volcker’s key arguments last month, when suggesting that current policy “continued to confuse being ‘market friendly’ with being ‘friendly to markets’“.

There is absolutely no reason why banks should be allowed to maintain the “pervasive conflicts of interest” that Volcker describes. Equally, Volcker’s belief that “we need to produce more, finance less” is a powerful message of support for people working in the chemical industry value chain. As one senior industry figure told the blog, “It’s a mega change in the history of lending. No more big balance sheets and implicit Government ‘insurance’ to prop up flaky lending“.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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