With the release of the Volcker rule, the Dodd-Frank Act’s regulatory overhaul is largely complete, giving banks a new degree of certainty about the limits of their business in the wake of the 2008 financial crisis.
The rule, issued Tuesday by five U.S. agencies, bars banks from speculating with their own money. In the three years since Dodd-Frank was enacted, regulators also have completed guidelines on how the government will dismantle the largest financial institutions when they fail, taken steps to make derivatives trading more transparent, increased the amount of capital banks must hold, and defined which mortgages are considered risky.
