The Obama administration's proposed Volcker rule could impact about 10 percent of Goldman Sachs net revenues, a senior executive of the Wall Street giant told a U.S. Senate committee on Thursday.

His remarks came in the second of two hearings this week by the Senate Banking Committee on Obama administration proposals made last month to limit risk-taking by major banks in the wake of the financial crisis.

Gerald Corrigan, a Goldman managing director, told the hearing about the potential impact of the proposals to curb proprietary trading by banks and get them out of hedge fund and private equity businesses.

If you took net revenues associated with ... proprietary trading and hedge fund and private equity funds, we are in net revenues talking about something over the cycle in the broad order of magnitude of 10 percent, Corrigan told the hearing.

The White House has shifted to a more aggressive stance on Wall Street since the Democrats lost a Senate seat in a special election in Massachusetts in January.

The election highlighted voter resentment against big banks and big bonuses in the wake of massive bailouts during the financial crisis.

At the outset of the hearing, Democratic committee Chairman Christopher Dodd blasted banks and Wall Street for a refusal to work with Congress on a range of proposed financial reforms that borders on insulting to the American people.

Criticizing firms for hiring an army of lobbyists to fight reforms, Dodd said Obama's new proposals were on the right track, but will be no easy feat to implement.

Corrigan, a former president of the U.S. Federal Reserve Bank of New York, and JPMorgan Chase Chief Risk Officer Barry Zubrow both expressed support for some of the financial regulatory reforms being considered by Congress since 2008, when taxpayers bailed out both firms and many others.

The two bank executives backed creation of a systemic regulator to monitor the economic big picture, and find a way for the government to dismantle large, troubled financial firms in an orderly fashion. Both proposals have wide political support.

Corrigan said more global cooperation is needed on accounting, bank supervision and economic policies.

He stressed the importance of mark-to-market accounting, or pricing assets at market value, and said tightening the Federal Reserve's emergency lending authority would reduce the probability of future financial crises.

Corrigan is a member of the Group of Thirty, an organization of bankers and regulators chaired by Paul Volcker, the former Fed chairman who is now an Obama economic adviser. Volcker inspired the proposals made last month.

The proprietary trading and hedge fund limits included in the proposals have become known as the 'Volcker rule.'

John Reed, a former top executive at Citigroup Inc , also testified on Thursday and expressed support for Volcker's approach. I tend to favor Mr. Volcker's thought on regulating some of these kinds of activities, Reed said.

He also called for stronger capital and liquidity standards, more exchange-trading of financial products and a compartmentalized financial industry.

Reed also advocated establishing a regulator for consumer finance, saying, There is a good reason to create a Consumer Protection Agency with a clear and separate mandate.

Creation of an agency to shield Americans from abusive mortgages, credit cards and other financial products is one of the Obama administration's most controversial proposals for tighter financial oversight.

(Editing by Andrew Hay)

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