Federal banking agencies ease Volcker Rule restrictions

WASHINGTON (AP) — The Federal Reserve and four other bank regulatory agencies announced on Thursday that they have finalized a rule that will ease restrictions curtailing the ability of banks to make investments in such areas as hedge funds.

The announcement of the easing of regulations know as the “Volcker Rule” gave an immediate boost to bank stocks because the rule change could free up billions of dollars in capital in the banking industry.

The Volcker Rule was part of the overhaul of banking regulation approved in the Dodd-Frank Act passed by Congress in 2010 in an effort to curtail excesses that had led to the 2008 financial crisis, the country's worst banking crisis since the 1930s.

However, President Donald Trump had campaigned in 2016 on rolling back what he saw as over-regulation of the banks that had weighed on the economy by preventing the banks from making loans to qualified borrowers.