Obama to go on offensive against big banks: sources

President Obama speaks about financial reform after his meeting with the Presidential Economic Recovery Advisory Board at the White House, January 21, 2010.

WASHINGTON (Reuters) - President Barack Obama will go on the offensive against big banks on Thursday, voicing support for reforms that could threaten large institutions' bottom lines, according to financial industry sources.

Obama is expected to publicly voice support for some of the ideas advocated by Paul Volcker, the former Federal Reserve chairman who heads Obama's economic recovery advisory board.

The president is to meet with Volcker in the Oval Office on Thursday and is expected to advocate Volcker's idea for restrictions on large institutions' proprietary trading operations, the sources said, speaking anonymously because the proposals have not been unveiled.

Volcker and other policymakers have raised concerns about the risks and conflicts of insured depository institutions investing their own money, as opposed to customers' money, in securities, commodities, derivatives, hedge funds, and other financial products.

Obama is also expected to at least nod to the idea of giving regulators the power to break up big financial firms if their activities pose risk to the financial system, as well as call for stricter capital requirements and stricter regulation of derivatives.

(Reporting by Karey Wutkowski; Editing by Gary Hill)