Volcker Rule Ripple Effect Could Be Bigger Than You Think

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Mani
Published on
Updated on
Federal Reserve Jeffery Lacker

The new Volcker Rule’s restrictions on bank proprietary trading and hedge funds will have profound impact on the financial sector as a whole, notes IBISWorld Stephen Hoopes of IBISWorld points out that in addition to eliminating bank prop trading, the Volcker Rule prevents banks from maintaining or taking ownership stakes in private equity and hedge funds. Restrictions on banks’ investments The IBISWorld analyst points out that the Volcker Rule restricts a bank’s investment to 3% of a private equity or hedge fund’s total value and 3% of the bank’s total core capital. Moreover, this portion of the rule further separates…

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Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports