Senator Christopher Dodd has backed a government proposal to ban banks from owning proprietary trading operations, hedge funds and private equity funds, Bloomberg reports. The Senate Banking Committee Chairman also supported a plan to limit the market share of liabilities for large financial firms.
The plan to restrict banks, called the Volcker Rule, was initiated by former Federal Reserve Chairman, Paul Volcker. The proposal compels firms to select between owning an insured bank protected by government programs and engaging in proprietary trading, hedge fund or private equity activities.
