Former Federal Reserve Chairman Paul Volcker is voicing misgivings about legislation that would force banks to spin off their business in the complex financial products known as derivatives.
In a letter to key senators, Volcker says banks should be permitted to provide derivatives to customers "in the usual course of a banking relationship."
Volcker is an economic adviser to the White House and has advocated that commercial banks be prohibited from engaging in speculative trades with their own accounts.
But a pending Senate financial regulation bill would go further by forcing banks to give up not only their own trades but also the business of creating the financial products for clients.
Republicans have drafted an amendment that would strip that language from the bill.
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