Dodd_Frank

Question 1

What is considered the biggest change to financial regulation since the Great Depression of the 1930s?

Answer 1

The Dodd-Frank Wall Street Reform Act of 2010

Question 2

What is the goal of the Volcker Rule?

Answer 2

The proposal specifically prohibits a bank or institution that owns a bank from engaging in proprietary trading that is not at the behest of its clients, and from owning or investing in a hedge fund or private equity fund, and also limits the liabilities that the largest banks can hold.

Question 3

How does the Volcker Rule limit banking institutions?

Answer 3

Limits banking institutions from owning

• more than 3% of a hedge fund’s total ownership interest Limits banking institutions
• interests in hedge funds that exceed 3% of their Tier 1 Capital (Common Stock + Retained Earnings + non-redeemable; non-cumulative Preferred Stock)

Question 4

What does the Volcker Rule require banking institutions to disclose?

Answer 4

Relationships with hedge funds must be fully disclosed to regulators