MONTREAL (Reuters) - There is a good chance that a sweeping US financial reform bill will be passed in a "reasonable form", White House economic adviser Paul Volcker said yesterday, adding the bill could provide a basis for international coordination on coherent legislation.

The Senate version of the bill includes the substance of his proposed "Volcker rule" curbing risky practices by banks, though caution is needed to prevent changes that could limit its effectiveness, he said.

"This is a battle. Make no mistake about it," the former Federal Reserve chairman said at a conference here. But I do think that if we can get this bill passed in a reasonable form — and the prospects to me look pretty good — I think that we'll provide a basis for the other major countries to get together in a way that wasn't possible before.

"I hope that we will see progress among the other major financial markets anyway in adopting legislation that fits in coherently with the American approach," Volcker said at an International Economic Forum of the Americas conference.

The Volcker rule now being debated by US lawmakers would ban risky proprietary trading unrelated to customers' needs at banks that receive government backing; bar banks from sponsoring hedge funds and private equity funds, and limit big banks' future growth through a new cap on market share.

New tensions surfaced over the proposed regulation this week after Volcker said in a letter obtained by Reuters that he firmly opposes exemptions to his rule being sought by banks that say they make only small investments in private equity and hedge funds.