Volcker Rule

A federal regulation named after former Federal Reserve Chairman Paul Volcker that restricts banks from engaging in proprietary trading and limits their investments in hedge funds and private equity funds. Enacted as part of the Dodd-Frank Act following the 2008 financial crisis, the rule aims to prevent banks from taking excessive risks with depositor money. Its implementation reshaped Wall Street's trading desks and pushed many prop traders to launch their own independent funds.