The Volcker Rule restricts the ability of federally insured banks to trade for their own benefit, according to this article in the New York Times.
The article states that with the large losses by banks in the trading of financial securities, especially mortgage-backed assets, there has been a push for more federal regulations. The Volcker Rule is one of the regulations pushed by the Obama Administration after the credit crisis.
The measure’s main purpose is to keep federally insured deposits of average banking customers out of risk. To do so, one major part of the bars banks from making proprietary trades. Those are when the bank uses their money to place bets on the market that are unrelated to serving their customers. The rule would also bar banks from investing in hedge funds or in private equities.
The article states that the measure has been fiercely opposed by banks and large Wall Street firms.
If you or someone you know has lost money as a result of a banking investment, please contact Richard Frankowski at 205-747-1903 to discuss your potential legal remedies.