Q and A: What’s the Volcker rule about?

Q What does the rule stop banks from doing ?
A The strictures put a number of limits on short-term proprietary trading of securities, but these will not apply in cases where the bank is underwriting. Short-term trading for a bank’s own account will still be an option if they can prove they are hedging risk.

Q What’s the point in the changes?
A Volcker says the changes will bring “order” and restore trust in US commercial banks.

Q Where does the name come from?
A The rule is named after Paul Volcker, Federal Reserve chairman between 1979 and 1987, who proposed it in 2010

Q If it’s been decided on, does this mean the changes start now?
A Not quite. Though the rules have now been approved, they won’t come into play until mid-2015.

Q How popular is it with the industry?
A The reception has been lukewarm, at best. JP Morgan’s Jamie Dimon joked that traders would need a lawyer and a psychiatrist sitting next to them to work out their intent.