Who is the Volcker Rule named after?

The Volcker Rule is named after Paul Volcker, the former chairman of the U.S. Federal Reserve.

Volcker proposed the idea during the debate over financial reform after the 2007–09 global financial crisis. He argued that banks benefiting from the safety net of insured deposits and central-bank support should not make large speculative bets for their own accounts. This practice, known as proprietary trading, could expose the broader financial system to losses.

Congress incorporated the measure as Section 619 of the Dodd–Frank Wall Street Reform and Consumer Protection Act, enacted in 2010. The rule generally restricted proprietary trading by banking entities and limited certain investments in hedge funds and private-equity funds. It also included exceptions, including market-making, underwriting, and activities intended to serve customers.

A common mix-up is to treat the Volcker Rule as a complete return to the Glass–Steagall system. It was narrower: rather than completely separating commercial and investment banking, it targeted particular activities and relationships. Final regulations took effect in 2015, with parts later revised.