WASHINGTON — White House economic adviser Paul Volcker this week raised concerns about a provision in the Senate financial bill that would force commercial banks to spin off their swap desks into affiliates in order to receive federal financial assistance.

The provision, which aims to prevent bailouts of clearinghouses and bank swap dealers, has met with strong resistance already from many Republicans as well as the Federal Reserve, Treasury Secretary Timothy Geithner and the Federal Deposit Insurance Corp. It is being pushed by Senate Agriculture Chairman Blanche Lincoln, D-Ark., who this week took to the floor to vigorously defend her proposal by saying it is necessary to protect Main Street from risky trading on Wall Street.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.