Paul Volcker has an almost mythical status as the last unambiguously successful chairman of the US Federal Reserve, wise counsellor to President Obama and the man who supposedly knows how to fix the global financial system.

He's even lent his name to perhaps the boldest of Obama's proposed financial reforms, the Volcker Rule - which, if implemented, would ban licensed banks that receive taxpayer protection from engaging in proprietary trading, or significant trading for their own account (as opposed to working for their clients).

He was in town yesterday, giving a speech at the annual Wincott Awards for financial journalists. And I managed, in an impertinent way, to perform a journalist's arrest on Mr Volcker for two minutes: what he said into my microphone can be heard in a piece I put together for the Today Programme.

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I also had a longer chat with him, armed only with a notebook, and he made fascinating points in his off-the-cuff speech.

Here is what he believes can and will be done to mend broken finance, and where he sees the big looming risks.

1) He has no doubt that Congress will pass the Volcker rule.

2) He defines the Volcker rule in a simple way, which is that banks should use their capital only to serve the interests of their clients, rather than trading to generate speculative profits for their owners. He believes that if boards of banks are aware that's the spirit of a new law, they will impose significant restrictions on the activities of their executives.

3) He is not advocating a return to Glass Steagall, or a stipulation that retail banks should be wholly prohibited from engaging in investment banking, such as underwriting securities. He for one probably wouldn't say hooray if the new British government's independent banking commission came up with a scheme for complete separation of retail and investment banking (which is what it is apparently being mandated to find, based on the formulation in the Tory-LibDem agreement).

4) The Volcker rule would have profound implications for a relatively small number of US banks, perhaps four or five. The most profoundly affected would be Goldman Sachs, which might feel obliged to give up its banking licence, in order to continue trading for its own account on the scale it has been doing.

5) His tone was pretty downbeat about the likelihood that the regulators and central bankers of the Basel Committee on Banking Supervision would any time soon come up with proposals to reform capital and liquidity requirements to significantly improve the robustness of the banking system. Which is why he is a passionate advocate of his own structural reforms.

6) Because there may be some element of trading by investment banks that can't be formally prohibited, he believes there may be a role for massively increased capital requirements on residual trading activities by banks (which is what Lord Turner advocates).

7) America's financial sector became far too big, relative to the US economy.

8) Much financial innovation was designed to extract rent (often in the form of premia paid by gullible investors) rather than making a contribution to the growth potential of the economy.

9) He is not in favour of Senator Blanche Lincoln's proposals which in effect would have banned involvement in derivatives by banks with access to liquidity support from the US Federal Reserve (I am told her clause in the financial reform bill being debated in Senate is likely to be voted down next week).

10) Derivatives need to be made safe, in Volcker's view, by forcing more-or-less all derivative trading through central clearing houses and regulated exchanges. This would mean that those exposed to derivative transactions would have to post more collateral when prices move. And it would make the transactions more transparent and more open to scrutiny. Such reforms would also make these deals much less profitable for investment banks, by reducing their ability to extract rent from the gullible, which is why they're hated by many bankers.

11) When I asked him whether he favoured new taxes on banks, of the sort proposed by the International Monetary Fund and the new British government, he said that was not something he has been advocating.

12) The financial stresses on the eurozone are the big concern of the moment (as we know). He implied - though didn't quite say - that he couldn't see how the eurozone could survive without further political integration that would legitimise necessary coordination of member states' tax and spending policies. If he's right, the pro-European Lib Dems in the new government, including Mr Clegg, might I suppose become concerned that the UK would be an outcast from a more integrated EU central core - which could test the unity of the new coalition.

13) He said that we should not kid ourselves that it's business-as-usual again in international finance. Banks and the financial system remain on life support provided by taxpayers. He gave the example of the US mortgage market: mortgages securitised into bonds are the biggest part of the biggest capital market in the world (the US bond market); and 90% of all mortgages are - through the mortgage-backed bond market - in effect granted or bought by US government agencies. Which is not, in any sense, free-market capitalism.