Paul Volcker: ring-fencing banks is not enough Mr Volcker said that it was unclear how the two parts of banking could be entirely independent when under ring fencing they would be subordinated to the holding company. I think they bowed to practicality. But Vickers will now have to define what is allowed in the relationships between the two subsidiaries. Ultimately, there is a natural instinct to have a close relationship within a bank. And this is particularly true when the bank is under pressure. By the time the banks look at Vickers they will think that Volcker looks better. In the US, the "Volcker Rule" - the precursor to Vickers - advocates an outright ban on all forms of risky investment activity on the bank's own account, such as proprietary trading. The rule, part of the Dodd-Frank act is yet to be finalised and has drawn scathing remarks from banking bosses. Following Sir John's recommendations, Britain's biggest banks will get until 2019 to implement ring-fencing reforms, which are hoped, will protect taxpayers from having to bailout the system again. The Vickers report said that the aggregate balance sheets of the UK's banks was over £6 trillion and that between one sixth and one third of these should be protected from investment banking operations. Last Friday, the Bank of England Governor Sir Mervyn King said that the Government had watered down the proposals after frantic lobbying from the industry. The Governor also expressed disappointment over the choice to 'ring fence' rather than opt for "total separation," which he was reported as saying was his more natural inclination. Mr Volcker also hit out against the political grid lock and the billions spent in lobbying in Washington, which he says risks corrupting the political system ahead of the up coming US elections. I am really disturbed about the power of money in Washington. By the end of this election more than $1bn will have been spent by each candidate. We are in danger of getting to a place where the US government risks being for sale. That is a valid concern.