Paul Voclker: Breaking up big banks "nearly impossible"

Paul Volcker, the former head of the Federal Reserve and a driving force behind financial reform in the US, has said that the task of splitting up Wall Street banks now seems "almost impossible".

"I don't like these banks being as big as they are," Mr Volcker told a conference at Bretton Woods in New Hampshire on Sunday night. But "to break them up to the point where the remaining units would be small enough so you wouldn't worry about their failure seems almost impossible," he said.

The concern about the effectiveness of the reform of Wall Street since the crisis from Mr Volcker, who was chairman of the Fed for almost a decade from 1979 and, more recently, an adviser to President Barack Obama, comes as the Independent Banking Commission (ICB) today delivered its report on the future structure of British banks.

Regulators in the world's financial capitals are wrestling with how to make the financial system safer without prompting banks to leave for jurisdictions where regulation is lighter.

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