The Dodd-Frank Wall Street Reform and Consumer Protection Act was the conclusion to how to deal with the risks created by reckless finance. Paul Volcker, former chairman of the Federal Reserve before Alan Greenspan, played a referee-like role in forming the bill, but his main goal was to preserve the so-called Volcker Rule. The rule barred banks from speculating in the markets and from operating and investing in hedge funds and private-equity funds. Volcker believed that it would help restore the divide between commercial banking and investment banking—if effectively enforced. Last-minute compromises to the bill signed into law almost two years ago weakened the Volcker rule. “The ban on proprietary trading is still there,” Volcker said. “But I’m sorry we lost tighter limitations on hedge funds and private equity. I’m a little pained that it doesn’t have the purity I was searching for.”
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