With the passage of the 2010 Dodd-Frank Act, Congress instituted a host of new laws attempting to protect consumers from the types of risky trading that led to the 2008 economic crisis. However, many of the new rules and regulations, including the Volcker Rule, are yet to fully take effect. Among other restrictions, the Volcker Rule attempts to curtail risky trading by limiting banking entity investments in private equity and venture capital funds. As the Volcker Rule nears its implementation deadline, banking entities are concerned that they will face substantial losses in having to comply with the Volcker Rule by being forced to sell their investments at fire-sale prices.
Jeffrey Koh & Kyle Gaughan,
The Volcker Rule, Banking Entities, and Covered Funds Activities,
Mich. Bus. & Entrepreneurial L. Rev.
Available at: http://repository.law.umich.edu/mbelr/vol4/iss1/3