Paul Volcker, former chairman of the Federal Reserve and current chairman of the President's Economic Recovery Advisory Board, took a shot at the banking and finance industry yesterday during the Future of Finance Initiative sponsored by the Wall Street Journal: “I wish someone would give me one shred of neutral evidence that financial innovation has led to economic growth — one shred of evidence.”
He wasn't totally critical of the industry, however: "The most important financial innovation I've seen in the last 25 years is the automatic teller machine." Ouch!
Euro dollars, dollar-denominated savings accounts from European banks not subject to US regulation, have allowed lenders and borrowers to by pass usury ceilings on interest rates. Surely that counts as an unambiguous contributor to economic well being. --Luke
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