Volcker Says Substance of His Rule in Senate Bill

(Reuters) – White House economic adviser Paul Volcker said on Wednesday the substance of his proposed rule curbing risky practices by banks is in the Senate version of the U.S. financial reform bill, but said caution is needed about changes that could limit its effectiveness.

“The way it’s in the Senate bill may be revised with an amendment, but the substance is there. The House is I think broadly sympathetic. So I think the odds are good that something will emerge,” Volcker told reporters at a conference here.

“Whether there will be some amendments made that will limit its effectiveness, we have to be cautious about that … and try to avoid that happening,” he added.

The proposed “Volcker rule” being debated by U.S. lawmakers would ban risky proprietary trading by banks unrelated to their customers’ needs; bar them from sponsoring hedge funds and private equity funds; and limit their future growth through a new cap on market share. (Reporting by Jonathan Spicer; Editing by Leslie Adler)