Gerald Corrigan, a former head of the New York Federal Reserve, on Thursday attacked his former boss Paul Volcker's reform efforts.

In testimony to the Senate Banking Committee, Corrigan, who is now a managing director at Goldman Sachs, said the activities the Volcker Rule seeks to outlaw pose little threat to financial stability.

Plans to prohibit banks' interests in hedge and private-equity funds were, he said, unnecessary. "The financial risks associated with such ownership or sponsorship can