the challenge is real

Banking will never be boring. Banking is a risky business. They are going to have plenty of activity. They can do underwriting. They can do securitization. They can do a lot of lending. They can do merger and acquisition advice. They can do investment management. These are all client activities. What I don’t want them doing is piling on top of that risky capital market business. That also leads to conflicts of interest.

Paul Volker:

What complicates this situation, as compared to the ordinary garden variety recession, is that we have this financial collapse on top of an economic disequilibrium. Too much consumption and too little investment, too many imports and too few exports.

We have not been on a sustainable economic track and that has to be changed.

But those changes don’t come overnight, they don’t come in a quarter, they don’t come in a year. You can begin them but that is a process that takes time. If we don’t make that adjustment and if we again pump up consumption, we will just walk into another crisis.

What should I say? … We have not yet achieved self-reinforcing recovery. We are heavily dependent upon government support so far. We are on a government support system, both in the financial markets and in the economy.