The 2012 Global Financial Markets Forum (GFMF) will kick start with a keynote address by Paul Volcker, the Former Chairman of the US Federal Reserve System and economic advisor to President Barack Obama, on February 29.
GFMF, the annual conference organised by the Financial Markets Division of the National Bank of Abu Dhabi (NBAD), the Number One Bank in the UAE, will commence on February 29 and concludes on March 1st, 2012. Inviting Mr. Volcker to GFMF confirms that the annual forum focuses on addressing the most current and critical issues of the day.
Mr. Volcker’s keynote address is titled: “The Future of Global Financial Markets and the Impact of the Volcker Rule.”
In his capacity as advisor to President Barack Obama, Mr. Volcker proposed a set of financial reform rules that included restricting commercial banks from proprietary trading, which he called “speculative trading” because it adds an unnecessary layer of risk.
In a recent conversation with GFMF's organisers, Mr. Volcker says about the scope of these regulations: “The impact beyond the USA will be minimal, and to the extent it exists is likely to be constructive.”
“Proprietary trading indirectly leads to conflicts of interest with bank customers, patterns of compensation and organizational culture out of keeping with traditional banking,” Mr. Volcker adds. “Commercial banks provide services essential to the economy - maintaining its payments system, lending particularly to small and medium-sized businesses, and providing a safe depositary for liquid funds. Those banks are supported by access to the central bank, deposit insurance, and other assistance in time of need. That government (aid) amounts to an indirect subsidy by taxpayers. That subsidy should not be extended to proprietary (i.e. speculative) trading.”
Mr. Volcker said: “Abu Dhabi and the GCC should be supportive of the efforts to reform the financial system that so sadly broke down after the boom years of the 1990's and early 2000. The Arab nations can contribute to those efforts through membership in the IMF and other key international institutions, including financial support when required.”
Mahmood Al Aradi, the Senior General Manager of NBAD’s Financial Markets Division, says Mr. Volcker is an ideal choice to speak about markets' recent and future challenges.
“Certainly, Mr. Volcker insights into market factors, economic models and philosophy on recovery would be invaluable.” says Mr. Al Aradi. “The fact that Mr. Volcker would be in Abu Dhabi to address a matter of high concern to financial services industry confirms the significance of the Global Financial Markets Forum.”
Volcker served in the Federal Government for nearly three decades and under five presidents: John F. Kennedy, Lyndon B. Johnson, Richard M. Nixon, Jimmy Carter and Ronald Reagan.
In 1979, Volcker was nominated by President Jimmy Carter to fill the most powerful economic seat in government--chairman of the Federal Reserve Board. As chairman, he also had oversight of the 12-member Federal Open Market Committee (FOMC), which decides the conduct of U.S. monetary policy.
As chairman of the Federal Reserve Board during one of the most turbulent periods in U.S. monetary history, Volcker instituted tough economic policies that halted the runaway inflation staggering the American economy in the late 1970s and early 80s, and ushered in an era of financial deregulation and innovation. As a financial leader of extraordinary capability, unquestionable diligence, and uncompromising integrity, Volcker's steadfastness in applying this economic shock therapy is credited as the single most important step on the road to economic renewal in the United States at the time and laying the groundwork for the boom years in the 1990s.
From 2009-2011, Volcker was an economic advisor to President Barack Obama, leading the President's Economic Recovery Advisory Board. On January 21, 2010, President Obama proposed bank regulations which he dubbed "The Volcker Rule", in reference to Volcker's aggressive pursuit of tougher financial regulations. The proposed rules would prevent commercial banks from owning and investing in hedge funds and private equity, and limit the trading they do for their own accounts.
The 2012 GFMF, which will take place is Abu Dhabi’s Emirates Palace, is the fourth annual event. Last year’s GFMF attracted 700 delegates from across many countries, including such notable speakers as Dr. Nassim Nicholas Taleb, the author of “The Black Swan;” and author, academic and economic commentator Jim Rogers.