“The Volcker Rule.”
This is a key term to know ladies—especially if you are dating any sort of banker.
Remember the now-defunct Glass-Steagall Act and how it separated commercial and investment banks?
The Volcker Rule (tucked into Dodd-Frank) is trying to separate these two types of banking yet again! Never again should a commercial bank take on too much risk and gamble away its deposits à la 2008. Therefore, commercial banks must limit their use of proprietary trading and sponsoring private equity firms or hedge funds (and their excessively risky behavior).
If you want a detailed play-by-play, here is a well-done New Yorker article.
Oh and if you are dating a banker, please note he will most likely not be a fan of The Volcker Rule. Proceed with caution. But at least you’ll understand what he’s complaining about next time!
(Originally published on Amanda Stanhaus’s financial literacy blog XO, Bettie.)