Volcker Rule

The US equivalent of the Vickers Report. The Volcker Rule separates investment banking, private equity and proprietary trading (hedge fund) sections of financial institutions from their consumer lending arms. Banks are not allowed to simultaneously enter into an advisory and creditor role with clients, such as with private equity firms. The Volcker Rule aims to minimise conflicts of interest between banks and their clients through separating the various types of business practices financial institutions engage in.