Volcker Rule

On January 21, 2010, President Barack Obama proposed that certain bank regulations be added to the Dodd-Frank Act. The president dubbed the additions the “Volcker Rule.” The “rule” was named after the former Federal Reserve chairman Paul Volcker. The rule is designed to provide a regimen of macroprudential oversight to restrict systemically important financial institutions (SIFIs) from undertaking proprietary activities entailing high risks accompanied by serious conflicts of interest. President Obama also announced his intention to end the mentality of “too big to fail” when in 2008 and 2009, the U.S. government stepped in to cover losses sustained by SIFIs resulting from morally hazardous trading that enabled the SIFIs to reap profits from aggressive speculative activity while shifting losses onto the taxpayers. In a February ...