The Economic Analysis of Volcker Rule

Choi Gyoung-Gyu ()
Additional contact information
Choi Gyoung-Gyu: Department of Business Administration, Dongguk University, 30, Pildong-ro 1gil, Jung-gu, Seoul, 04620, Korea

Asian Journal of Law and Economics, 2021, vol. 12, issue 2, 121-148

Abstract: This paper aims to analyze the final regulations of the Volcker Rule in order to assess any lingering concerns related to the administration of the Rule. Despite the problems criticized by many practitioner and scholars, implementing the Volcker Rule has benefits for banks and the overall economy. First, prohibiting proprietary trading activities may make individual institutions and the banking system as a whole safer. Second, the prohibition on banks’ ownership interest in private equity and hedge funds directly addresses a source of bank default risk – the Volcker Rule limits banks’ exposure to risky private equity and venture capital activities, which are activities that contributed to banks’ probability of default during the 2008 financial crisis. Third, heightened compliance standards and documentation requirements will help improve transparency of banking activities and contribute to bank stability.

Keywords: ABS; Bank Holding Company Act; covered fund; Dodd–Frank Act; proprietary trading; repurchase agreement; Volcker Rule (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/ajle-2021-0020 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:ajlecn:v:12:y:2021:i:2:p:121-148:n:1

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/ajle/html

DOI: 10.1515/ajle-2021-0020

Access Statistics for this article

Asian Journal of Law and Economics is currently edited by Noriyuki Yanagawa

More articles in Asian Journal of Law and Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().