Washington politics seems like it may be leaving Paul Volcker, White House economics advisor, a little less upbeat. A couple weeks ago, he was “more optimistic” than he had been that a financial reform bill would pass this year. Today, at a talk to the Levy Economics Institute he said only that he was hopeful that useful structural reform will pass.

Mr Volcker criticised those in the financial community who “bitterly fighting” credit default swap regulation. They were, he said, “pushing back against what seems to be reasonable protection against the next crisis and its effects,” saying there should have been some “better” and “more expeditious way” of dealing with the problem of AIG’s CDS-fueled collapse.

The unnecessarily acrimonious CDS fight isn’t Washington’s only problem. Mr Volcker also lashed out at the politics that – 15 months after inauguration and in the midst of an economic crisis – have left the Treasury without permanent replacements for the two top finance posts: under secretary for domestic finance and under secretary for international affairs. “There is something the matter in Washington,” said Mr Volcker. Read more