(EnergyAsia, February 26 2010, Friday) — US President Barrak Obama’s economic recovery adviser Paul Volcker wants the government to prohibit banks from “risky financial activities” like derivatives trading and leave these only to hedge funds.

Speaking recently in the UK, he said banks should stick to providing basic banking services, and let hedge funds undertake high risk, speculative trades in exotic instruments.

Mr Volcker said that credit default swaps and collateralised debt obligations had taken the economy to the brink of disaster and do not provide any service or value to the real economy.