January 14, 2010 / 6:30 PM / 10 years ago

Volcker: New bank tax "not an unreasonable response"

NEW YORK, Jan 14 (Reuters) - Plans by the Obama administration to impose a fee on major U.S. financial institutions to recoup the cost of bank bailouts are “not an unreasonable response,” Paul Volcker, an economic adviser to President Barack Obama, said on Thursday.

The former Federal Reserve chairman told a lunch meeting at the Economic Club of New York that Obama had to respond to growing budget deficits and the “very real public anger.”

“It’s not an unreasonable response, given the fact that he’s got to do something,” Volcker said.

Volcker said that it was “not unfair” to put restrictions on institutions that have benefited from the bailouts.

Volcker chairs the President’s Economic Recovery Advisory Board, a panel of outside advisers set up at the start of the Obama administration.

Reporting by Kristina Cooke and Steven C. Johnson, Editing by Chizu Nomiyama

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