Financial Reform: Overview of the Volcker Rule [July 9, 2018]   [open pdf - 306KB]

"Legislators and regulators have long grappled with whether restricting the types of activities banks can engage in, or reforming banks' structures, might reduce the risk of large bank failures and the risk of systemic financial instability, such as that seen in the 2008 financial crisis. The Volcker Rule is an example of a means of addressing this issue. The statutory basis of the Volcker Rule is Section 619 of the Dodd-Frank Act, enacted in 2010 following the crisis. It was conceived of by Paul Volcker, a former Federal Reserve (Fed) chair, and implemented as 'the Volcker Rule' in a 2013 joint final rule by five financial regulators: the Fed, Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Securities and Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC). The Volcker Rule generally prohibits a depository bank (or company that owns one) from engaging in proprietary trading or investing in (or sponsoring) a hedge fund or private equity fund. The rule has been subject to debate and was recently amended through legislative action. Regulators have also proposed further changes to the rule."

Report Number:
CRS In Focus, IF10923
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