White House says committed to 'Volcker Rule' on trading

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The White House said on Thursday it was still committed to banning risky trading by banks under the so-called "Volcker Rule," after Federal Reserve chairman Ben Bernanke appeared to pour cold water on the idea.

"The administration is as committed to the Volcker rule as we were the day the president announced (it) because we should not allow banks to use the federal safety net to support risky activities that are unrelated to serving their customers," White House Deputy Communications Director Jen Psaki said.

"We will provide legislative language to the Senate Banking Committee and will work with Congress to implement these proposals in the final bill," she said.

She also said that the top priority in establishing a new consumer financial protection agency (CFPA) was ensuring that it had independent powers.

President Barack Obama has called for the creation of an agency that would safeguard consumers against fraud in the aftermath of the sub-prime mortgage crisis and has said he wanted it to be separate from other bank regulatory agencies.

Some discussion has arisen in the Senate of a compromise in which the consumer agency would be housed inside another regulatory department but would have independent powers.

"Our top priorities on CFPA are ensuring the bill includes independent appointment, an independent budget, and an independent ability to set and enforce clear rules of road to protect American families," Psaki said.

Psaki's comment seemed to suggest the more important issue for the White House is the agency's independence rather than where it is housed.