Bank Regulation revisited

Back on March 29th I wrote in favour of a return to something like the American Glass-Steagall separation of investment and commercial banking activities. Last week I was in the US and read an article in the New York Times which reported that Paul Volcker, a former Chairman of the Federal Reserve is advocating the same thing. http://www.nytimes.com/2009/10/21/business/21volcker.html?_r=1&partner=rss&emc=rss
On my return to the UK I found that Mervyn King, Governor of the Bank of England is also calling for such a split. http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6888866.ece
OK, it is nice to be in such auspicious company, but the point is this: why, over a year since the banking crisis, despite all the government outrage on both sides of the Atlantic at the time, has nothing been done? Extra capital requirements, limits on pay and other layers of regulation are essentially clumsy and can eventually be circumvented. The simplest solution is almost always the best. Simple, but not easy. No government wants to be the first to act, so it will take the US and Britain to act together. Well I won't be holding my breath, but it would really be interesting to know where the Conservatives stand on this. Maybe time for a bold policy announcement?