# Volcker Rule

*Regulation & Compliance — Finicade finance glossary*

The Volcker Rule bars banks with insured deposits from proprietary trading and from sponsoring hedge funds with their own capital.

The Volcker Rule bars banks with insured deposits from proprietary trading and from sponsoring hedge funds, on the principle that publicly backstopped institutions shouldn't speculate with their own capital. The rule's difficulty is definitional: distinguishing prohibited proprietary trading from permitted market making and hedging requires judging intent, which is why the implementing regulations ran to hundreds of pages.

**Also known as:** Volcker, prop trading ban

**Related terms:** [Dodd-Frank Act](https://finicade.com/glossary/dodd-frank-act), [Proprietary Trading](https://finicade.com/glossary/proprietary-trading), [Investment Bank](https://finicade.com/glossary/investment-bank), [Glass-Steagall Act](https://finicade.com/glossary/glass-steagall-act), [Market Maker](https://finicade.com/glossary/market-maker)

Source: https://finicade.com/glossary/volcker-rule