Volcker Rule Ripple Effect Could Be Bigger Than You Think

The new Volcker Rule’s restrictions on bank proprietary trading and hedge funds will have profound impact on the financial sector as a whole, notes IBISWorld

Stephen Hoopes of IBISWorld points out that in addition to eliminating bank prop trading, the Volcker Rule prevents banks from maintaining or taking ownership stakes in private equity and hedge funds.

Restrictions on banks’ investments

The IBISWorld analyst points out that the Volcker Rule restricts a bank’s investment to 3% of a private equity or hedge...