Received via email at 11:28 PM EST for publication. ~ Dinar Chronicles
The Volcker Rule is part of Dodd-Frank and prohibits banks from owning, investing, or sponsoring hedge funds, private equity funds, or any proprietary trading operations for their own profit.
To help banks figure out which funds are for their profits and which funds are for customers, the Fed has given banks two years to divest their own funds in get in line with the rule before it's enforced.
However banks can keep any funds that are less than three percent of revenue.
The Volcker Rule does allow some trading when it's necessary for the bank to run its business. For example, banks can engage in currency trading to offset their own holdings in a foreign currency.