Former Federal Reserve chairman Paul Volcker says the "Volcker rule" in the proposed financial reform legislation is not the rule he envisioned.

“We have to have a regulatory system that reflects today’s problems and tomorrow’s potential problems,” Volcker told The New York Times. “This bill attempts to do that.”

“Does it do it perfectly? Obviously it does not go as far as I felt it should go.”

Volcker proposed the rule, a watered-down version of which was incorporated into the financial regulatory bill, after realizing that speculative trading by commercial banks had gotten out of hand.

“The success of this approach is going to be heavily dependent on how aggressively and intelligently it is implemented,” Volcker says. “It is not just a question of defining what needs to be done, but carrying it out in practice, day by day, bank by bank.”

Though he approves of the limits placed on banks’ trading activities, Volcker thinks the legislation doesn’t do enough to curb banks’ risky investing activities.

“There is a certain circularity in all this business,” Volcker says. “You have a crisis, followed by some kind of reform, for better or worse, and things go well for a while, and then you have another crisis.”

“People are nervous about the long-term outlook, and they should be.”

According to Reuters, Democrats will have little margin for error as they push for final U.S. congressional approval of the most comprehensive rewrite of financial rules since the Great Depression.