Remarks by Paul A.Volcker in remembrance of Tommaso Padoa-Schioppa
10 February 2011
Tommaso Padoa-Schioppa, who was the Chairman of the IFRS Foundation Trustees, passed away in December 2010. Below is a speech by Paul A.Volcker in remembrance of Tommaso, given at Bocconi University in Milan, Italy, on 1 February 2011.
"Mr. President, Honored guests, Family and friends of Tommaso Padoa Schioppa, the new generation of Bocconi students:
You have been listening today to men who knew Tommaso for a longer time than I. They worked with him day-by-day for decades, together building a stronger Europe and Monetary Unity.
I am from another part of the world. I do not recall precisely when I first met Tommaso. It was certainly decades ago. I do know one thing for sure. I, and all his colleagues in the world of international finance, quickly came to understand that here was a young man of great talent, with strong convictions. A proud Italian, he also had an unusual ability to understand the positions of others. His instinct was always to seek common approaches in the collective interest.
It was those qualities, combined with his European vocation, that led him to work with Jacques Delors in creating the Euro. And then joining with Jean Claude Trichet in building a strong, independent central bank for Europe.
During all those years, Tommaso, without any official mandate, became in practice Europe’s ambassador to the financial world. He went a long way toward convincing even the skeptics that the ECB and the Euro were here to stay. I was naturally one of those who came to know him well, through his long participation in the Group of 30, as a true student of international monetary affairs, and finally, I am proud to say, as a personal friend.
It was that friendship that led to a number of conversations about life after central banking. Of course, we recognized that after Tommaso’s time with the ECB he might at any time be called back to a key position in the Italian government. But that was all a matter of speculation, not at the time a reality. I took advantage of the interlude to persuade him to replace me as Chairman of the International Accounting Standards Committee which oversees the effort to achieve common accounting standards right around the world.
Accounting standards by their nature are detailed, complex and not something that attracts attention and makes the blood run strongly. But the fact is, in a world of global finance, common accounting standards are, in fact, a matter of fundamental importance. Technical as they may be, they are sometimes highly controversial, politically as well as among businesses.
What was particularly of concern at the time for all of us involved in building strong standards and achieving a consensus was vocal opposition in some European countries. The IASC was perceived by some as a self-appointed body of “mandarins” setting out rules insensitive to national priorities.
In those circumstances, what better choice than to appoint as Committee chair a man with relevant experience, obviously highly competent, and at the same time able in his very person to command respect in Europe. Tommaso Padoa Schioppa was the answer!
To tell the truth, there was a moment of hesitation. Tommaso after all was not known in Japan or India, in Latin America or even in accounting circles in North America. What became a testimonial to the man was the speed with which his new colleagues came to respect Tommaso and his strong leadership. His whole-hearted commitment to the mission of achieving common accounting standards around the world was apparent to all.
I recall well several conversations when Tommaso agonized over how to respond to a possible request to become Minister of Finance. The substantive, political, and personal challenges were obvious. But to me, and I think to him as well, it always seemed unthinkable for him not to respond to the call of national duty. You here know full well how admirably he served his country.
Happily for the International Accounting Standards Committee, he was willing, even eager, to reassume the chair when his national responsibility was over.
Now, sadly, he is suddenly gone.
He left us at the peak of his influence. He has been one of the few leaders in the world of international financial affairs who have kept alive the possibility of reform of the international monetary system.
Now, all of us involved in that effort will miss the energy and the personal participation of Tommaso.
Fortunately, he has left a large heritage, a heritage in his contributions to the European Union, to the Euro, to the European Central Bank, and yes, to the prospect that common international accounting standards are close to reality.
As I wrote this remembrance, I had on my desk Tommaso’s recent Per Jacobsson Lecture. He reflected on the worldwide economic crisis and its implications for the future. It was a long finely written essay, drawing on political thinking through the ages, economic history, and the role of markets.
His basic conclusion resonates today. He emphasized the nature of the crisis: I quote “global in its origin, not only in its consequences…”. “Nothing”, he wrote, “excuses us – as responsible individuals – from the intellectual and moral duty of adopting a truly cosmopolitan perspective – a truly global policy”.
In first reading his essay, I scribbled on the text one word “brilliant”. I, for one, will keep that Lecture much in mind in the hope that even after his passing he can help us to “understand” and to “act”, the criteria he set forth for success in all our efforts to support a peaceful, prosperous world order."