Volcker Rule's VC Changes Will Support Underserved Regions

Law360 (October 29, 2020, 4:17 PM EDT) -- For nearly a decade, the Bank Holding Company Act, specifically the Volcker Rule, severely restricted banks and banking entities from investing in venture capital funds, effectively preventing them from backing the very types of investments the BHCA originally sought to promote: small businesses, regional businesses and startups that create jobs and spur innovation.

Implemented following the Great Recession, the Volcker Rule sought to curtail banks' investments in perceived high-risk assets and investment classes, like alternative investment vehicles, with the goal of reducing systemic risk in the banking system.

While the Volcker Rule never specifically called out venture capital funds in its...

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