Scott Marks 4:26 p.m., May 21
Volcker Says Financial System "Broken"
Former Federal Reserve Chairman Paul Volcker yesterday (Sept. 23) ripped up the speech he was to deliver to the Chicago Fed, and blasted the financial system, as reported by the Wall Street Journal and Bloomberg. He said the financial system was "broken" and the mortgage system "absolutely broken." Investment banks have become "trading machines instead of investment banks," encroaching on territory of commercial banks, which then have reciprocated. The end result has been a system very hard to regulate. Central banks have become "maybe a little too infatuated with their skills and authority," said Volcker. He told Bloomberg, "It's going to take a long time to repair the basic disequilibrium of the economy."