Volcker Goes Home to 'Mother,' Attacks Glass Steagall

May 15, 2010 (LPAC)—In the midst of the historic showdown between United States national interests and the City of London, who should show up in London on Thursday to be heard attacking Glass Steagall, but former Fed Reserve chairman Paul Volcker.

More was clearly discussed behind the scenes, but what was public was that Volcker championed his so-called "Volcker rule," asking banks to agree on good behavior in two speeches (including one in the official residence of the Lord Mayor of London's financial district); met privately with Bank of England head Mervyn King (who in a press conference just the day before had announced that the United States faces the same problem as Greece, for which the only solution, as for all other countries, is to cut its deficit), and attacked Glass-Steagall in an off-the-cuff interview with BBC.

BBC's Business Editor, Robert Preston, reports that Volcker told him "he is not advocating a return to Glass-Steagall, or a stipulation that retail banks should be wholly prohibited from engaging in investment banking, such as underwriting securities." Instead, he pressed his Volcker Rule, which, he made clear, is toothless, telling BBC that his "rule" simply means "that banks should use their capital only to serve the interests of their clients, rather than trading to generate speculative profits for their owners. He believes that if boards of banks are aware that's the spirit of a new law, they will impose significant restrictions on the activities of their executives."