In Europe, Volcker makes case for bank trading limits

In a speech at the Bellevue presidential palace in Berlin, Volcker made the case for proposals being pushed by the administration of President Barack Obama which would lead to a clamp down on risky bank activities.

The proposals have been dubbed the "Volcker rule" after the former Federal Reserve chairman.

"Without any limitation on proprietary activity by commercial banks, they will, indeed, over time come to take on the characteristics of hedge funds," Volcker said in the text of a speech provided to Reuters before delivery. "And then, I ask, could we expect the same attention to the more essential services?"

Volcker said that allowing banks to take customer deposits and at the same time engage in risky trading served "neither the public's interest in maintaining key services nor the need for a self-reliant, failsafe financial system."

He also urged steps to "corral excesses" in derivatives markets, including the use of credit default swaps (CDS).

"Surely the recent revelations about the use (and abuse) of complex derivatives in obscuring the extent of Greek financial obligations reinforces the need for greater transparency and less complexity," Volcker said in the speech text.

(Writing by Noah Barkin)