Here is a verbatim transcript of the exclusive interview with Paul Volcker on CNBC-TV18. Also watch the accompanying video.

Q: Can you give us a sense of that meeting in Washington today? I know the president is focused on jobs. What came out of that meeting?

A: The meeting wasn't public, so it can be broadly understood. He emphasized the importance of obviously getting sustainability of the economic recovery, which we hope and believe has started in Q3. However, we have got to move to an economy that can produce more jobs that means to be sustained over a period of time. He emphasized strongly that we need to improve our export ability and capacity that means more manufacturing. There was discussion of the importance of infrastructure and there was considerable discussion of how can we take advantage of the need for a green economy, where we do a lot of the innovation. But can we build upon the innovation that's a strength of the United States into actual production. Also, there was considerable talk about retrofitting buildings, save a lot of energy, and at the same time give some jobs.

Q: Everyone's looking at the economy and trying to figure out where the jobs come from next. Let me ask you, going into 2010, with cap and trade on the table and health care spending and most people expecting higher interest rates, do you think policies need to be changed in order to incentivise companies to actually create these jobs?

A: In those three areas I talked about, particularly in the area of retrofitting, I mentioned that because that's an area where you might generate quite a few jobs among the people that are not now employed. It doesn't take new technology, it doesn't take anything new and innovative; it takes the energy to get done more rapidly. What’s already being done on a small scale can be done more rapidly on a big scale.

Q: What is your sense of where we are right now? We had the GDP report out on Friday showing 3.5% growth. Was that largely government spending, or do you think this is sustainable? How do you see things right now?

A: The stimulus programme contributed to it. It was not largely government spending in a technical sense. We had the inventory picture changed because inventories have been reduced rapidly in the earlier quarters and not being reduced now, certainly not at the same speed. Housing is at the bottom. It showed a little recovery. So you have a variety of forces, recovery and investment. Things that were down but we're still very near the bottom.

Q: There was more evidence of that with the CIT Group declaring bankruptcy. Do you think that will have an impact given that it's such an important lender to the retail sector?

A: I am not an expert on CIT but I think they tried very hard to make this as smooth as you can possibly make it, and CIT will remain in business and continue their important function.

Q: I was reading about your comments recently as far as commercial banks versus investment banks. Do you think we should be treating the banks as utilities, pure lenders and not in the business of investment banking?

A: Pure lenders is an exaggeration of what I am saying. The banks are the core of the financial system and they should pay attention to their knitting, which is taking deposits, making loans, moving money around, helping people invest their money, do some underwriting. They have got a plenty of things to keep them busy.

Q: Would you like to see a separation of some of the riskier?

A: I would like to see speculative capital markets stuff done in the capital markets and the banks do their business.

Q: As far as financial reforms are concerned, give me your sense of what it would look like?

A: There are a lot of elements of financial reform. The administration has recommended a programme most of which I agree with was very important to have an overall overseer as they proposed. We need some resolution authority of non-banks in particular, as they proposed a lot of things to do with derivatives and credit default swaps. What do we do about credit rating agencies, there is a big area that is going to take a long time.

Q: A lot of people say thank god Volcker is where he is right now advising the President, you saved the economy once before we want you to save it again. Do you feel you are being listened to or are you being heard in the administration?

A: I have got a loud voice. Like I said, the decision in the end is not mine. I give them the best advice I can give them.

Q: What advice are you giving them right now?

A: That is a long story. No, I have good relationships with them. There is no problem between us.

Q: Do you feel that we should be seeing an exit strategy articulated in terms of government's ownership of business, in terms of the Fed programmes out there?

A: They are thinking hard, I am sure, about exit strategies. It is not an impossible problem. It will be a difficult problem. A lot depends on how the economy recovers. We have got to get some recovery going.

Q: Can you talk to us about the deficit. Are you worried, should this be a near term priority?

A: Everybody ought to be worried about the deficit. It's a big deficit. But the time will come to deal with it.

Q: When?

A: It all depends upon the economy.