A rule that was supposed to be implemented back in 2010 becomes a reality Wednesday five years after its inception.
The so-called Volcker Rule, which is Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is meant to restrict big U.S. banks from making risky speculative bets with funds from their own accounts through proprietary trading. The intent was to keep banks from the kind of hedging that puts customers in danger, helping to prevent another crisis like the one that brought the American economy to its knees in 2008.
The rule was initially scheduled for implementation in July 2010, but was repeatedly delayed. It is colloquially named for the economist who came up with it: former Federal Reserve Chair Paul Volcker, who led the economic recovery advisory board President Barack Obama assembled in 2009.
There have been successful lawsuits seeking to change the initial proposal over…
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