Michel Barnier, the European Commissioner for the internal market, said in an interview that he plans to raise objections with Mr Geithner next month about the potential impact of the so-called Volcker rule, which would restrict US banks from making bets with their own capital.
Barnier says that "the Volcker rule is a law which I am interested in", but that consequences must be considered. "I will talk to Mr Geithner next month. We can't accept extraterritorial consequences, or Europe will be tempted to do the same thing", Mr Barnier said.
The issue is particularly sensitive because many European countries are struggling to raise funds at affordable rates amid the eurozone's debt crisis.
While Mr Barnier didn't spell out the details of the Commission's objections, European officials said the concerns were that the Volcker rule could hamper US banks' ability to buy and sell European sovereign bonds on behalf of customers, reducing liquidity in those markets.
The Commission's objection comes after George Osborne, the UK Chancellor of the Exchequer, raised concerns with Mr Barnier at a meeting on Monday, the Commissioner said. Mr Osborne couldn't be reached for comment.
A spokeswoman for the US Treasury Department declined to comment. A spokeswoman for the Federal Reserve, which has played a key role in writing the Volcker rule, said: "All comments received will be evaluated before the board acts on the rule".
Mr Barnier's move will add to the pressure on the US government to revise the proposal, following similar complaints by Japan and Canada.
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