The Dodd-Frank Wall Street Reform and Consumer Protection Act ranks among the most important laws passed in recent history. It’s also extremely complicated, amounting to some 14,000 pages of various regulations and restrictions. The video below takes a look at one of the key provisions of this landmark bill: The Volcker Rule, or the stipulation that banks cannot act like hedge funds and gamble with their own cash reserves. Although reviled by many on Wall Street, supporters say the rule is perhaps the most effective deterrent against another financial crisis on the scale of 2008.
- Why is it dangerous for banks to invest too much of their own cash in risky ventures?
- Does the Volcker Rule prevent U.S. banks from being as competitive as their international counterparts?