In a recent edition of The Region magazine, published by the Federal Reserve Bank of Minneapolis, retiring Minn. Fed President Gary Stern interviews Paul Volcker on a variety of topics.  It’s an interview well worth reading, and reminds one why Volcker is one of the more thoughtful voices on economics and finance, even if he isn’t always right.

Some highlights.  On the Obama financial reform plan:

I do not share one part of the general philosophy which seemed to emerge from this, particularly the proposal that the Federal Reserve supervise directly all “systemically important” institutions. I don’t know what “systemically important” institutions are, incidentally, but I’m sure that if you picked them out, people will assume they’re going to be saved, that they’re too big to fail. At the same time, there’d be some that you don’t pick out in advance that you’d want to save under particular circumstances.  So I think that is a mistake.

Volcker also express concern that those institutions at the center of the crisis are left out of the reform.  Specifically he mentions that Obama Administration officials “haven’t said anything about Fannie Mae or Freddie Mac.”

Volcker also takes issue with the Administration’s proposal to regulate non-banks, including hedge funds and private equity.  “I wouldn’t regulate so strictly the nonbanks.  I’d like to create the impression…that there’s no automatic bailout of those institutions.”

Volcker also raises important questions about the Administration’s Keynesian stimulus actions.  As the stimulus was meant to replace a reduction in private sector demand, Volcker asks “are we really dealing with the underlying pressures in the economy without permitting a relative decline in consumption to proceed?”

Those are just a few of his comments.  Here’s to hoping the rest of the Obama Administration is listening.  They could do a lot worse than Volcker’s advice.