PAUL Volcker, the 82-year-old adviser to Barack Obama on financial regulation, held a meeting yesterday at the Bank of England at which he is believed to have advised the governor of the need to rein in UK banks in the name of reducing risk in the financial system.
Minutes before dashing to a meeting with Bank of England governor Mervyn King, Volcker told City A.M: “The financial system in both countries share some common elements. What’s good for the goose is good for the gander,” he said after attending a lunch hosted by the Lord Mayor of the City of London Nick Anstee.
Volcker is the architect of a bill going through Congress aimed at barring banks from proprietary trading and, if more hawkish senators get their way, from derivatives trading. King has said in the past he favours a system whereby banks that participate in riskier activities do not get bailed out by the taxpayer.
Volcker’s advice is bound to be taken seriously by King and by chancellor George Osborne, who will chair a commission looking into whether banks should be broken up.
Volcker said he feared for the possible disintegration of the euro.