After the inauguration and Geithner’s confirmation, Volcker was elbowed aside, White House insiders say. His economic recovery board took weeks to get off the ground — a delay people close to Volcker say he blames on Summers. And Volcker’s access to the president was limited. …
Things began to change in April. … Volcker is invited to meetings of the Financial Regulatory Working Group, which includes key staff from the Treasury and the NEC, and he joins sessions by phone if he can’t attend in person. He has sent more than 10 memos to Obama outlining his views and has met with the president more than a dozen times since March, people familiar with the group say.
Volcker’s influence can be seen in the proposals for regulatory change offered by Obama on June 17. While there’s no mention of separating banking and proprietary risk taking, the administration is proposing to set higher capital requirements for trading positions and equity investments. Volcker also pushed for better coordination among banking regulators, an idea that was adopted in the Obama blueprint.
“Better coordination among banking regulators” seems like pretty small beer, and Volcker would surely prefer a less flexible, less moderate approach to regulatory reform than the one outlined so far by the Administration. But at least he’s back to being involved in the conversation.