The digital era · 2000–today
2010
Dodd-Frank and the Volcker Rule
New US rules raise bank capital and limit banks betting with their own money.
The Dodd-Frank Act of 2010 tightened oversight of banks, including the Volcker Rule, which bars banks from most trading for their own profit. Internationally, Basel III raised capital requirements.
💡 Why it made sense then
The crisis showed banks had too little capital and too much risky trading.
Ideas it gave us
- 🏦 Volcker Rule
The Volcker Rule bars US banks that take insured deposits from most trading for their own profit, and limits their stakes in hedge funds and private equity.
- 🏦 Capital requirements
Capital requirements are rules that make banks fund part of their lending with their own money (equity) so they can absorb losses without failing. Under the Basel rules the minimum is 8% of risk-weighted assets.
Practise with $10,000 in play money
Free. No real money involved.