Wednesday Paul Volcker, White House economic adviser, said the current version of the U.S. Senate’s financial reform bill retains the essence of his proposed rule.
The “Volcker Rule” aims to attempt to reign in the high-risk practices of banking institutions. Volcker, however, cautioned against revisions in the legislation that would stifle the rule’s effectiveness.
“The way it’s in the Senate bill may be revised with an amendment, but the substance is there,” Volcker said to reporters.
“The House is I think broadly sympathetic. So I think the odds are good that something will emerge,” the White House adviser added.
Volcker continued with statement and said “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.”
Among the provisions in the “Volcker rule”, banks would now be barred from high risk trades unrelated to the needs of its clients; prohibited from sponsoring private equity and hedge funds; and placed a cap over market shares to limit growth, preventing the “too big to fail” dilemma the country faced during the financial crisis.
