The Volcker Conundrum

22 January 2010 By James Pethokoukis

Large as he is, he can’t be split in half. Yet the 82yearold former Fed boss seems almost the only plausible replacement for two U.S. officials whose positions look shaky Tim Geithner and Ben Bernanke. That’s one reason why neither may actually be out of a job any time soon.

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Context News

President Barack Obama said he believes the Senate will confirm Federal Reserve Chairman Ben Bernanke for a second term to lead the U.S. central bank. But leading liberal Democrats, including Senator Russ Feingold of Wisconsin, are voicing opposition to confirming Bernanke.

Bernanke's current fouryear term expires on Jan. 31. He will need at least 60 Senate votes for confirmation.

Treasury Secretary Timothy Geithner has expressed some skepticism behind closed doors about the broad bank limits proposed by Obama on Jan. 21, according to financial industry sources.

The sources said the Treasury chief is concerned the proposed limits on big banks' trading and size could hurt U.S. firms' global competitiveness. He also has concerns that limits on proprietary trading do not necessarily get at the root of the problems and excesses that fueled the recent financial meltdown, the sources said.

According to an official, Geithner and Lawrence Summers, the director of Obama's National Economic Council, worked closely with former Fed Chairman Paul Volcker, who heads a panel of outside advisers, in developing the bank limit proposals.

Context News

Treasury Secretary Timothy Geithner has expressed some skepticism behind closed doors about the broad bank limits proposed by Obama on Jan. 21, according to financial industry sources.

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