Volcker Rule: What It Is, What It Does, and Why Some People Don't Like It
Is the Volcker Rule a law?
The Volcker Rule is not a law. It is a rule that was promulgated by the U.S. Department of the Treasury, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Commodity Futures Trading Commission, and the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act. Which of the following are Volcker compliance program requirements under the Volcker Rule? 1. The Volcker Rule requires that a banking entity's compliance program must be reasonably designed to ensure compliance with the Rule.
2. The Volcker Rule requires that a banking entity's compliance program must be independently tested by a qualified firm at least once every two years.
3. The Volcker Rule requires that a banking entity's compliance program must include a system to promptly address Rule violations and prevent their reoccurrence.
4. The Volcker Rule requires that a banking entity's compliance program must be approved by the board of directors or a designated committee of the board.
5. The Volcker Rule requires that a banking entity's compliance program must be reviewed and updated regularly to reflect changes in the entity's business activities. Was the Volcker Rule repealed? No, the Volcker Rule was not repealed.
What does Dodd-Frank Act do?
The Dodd-Frank Wall Street Reform and Consumer Protection Act is a law that was created in response to the financial crisis of 2007-2008. The law regulates the financial industry and protects consumers from abusive practices. The law also created the Consumer Financial Protection Bureau, which is responsible for protecting consumers from financial fraud. How much did Volcker raise rates? Volcker raised rates in response to the high inflation rates of the late 1970s and early 1980s. He increased the federal funds rate from 11.2% in 1979 to 20% in June 1981. The prime rate rose to 21.5% in December 1980.