Category: Finances


The Volcker Rule And Why Your Money Is Safe With The Bank

If you have been thinking about what the bank does with your money, the Volcker Rule will let you breathe. Banks like columbia bank marlboro are aware of the Volker Rule and ensure that your money is safe in their hands.

With the Volcker Rule, commercial banks are prevented from using your deposits for their profits. They cannot use it for any hedging operations. Read ahead to find out just how the Volcker Rule keeps your money safe.

Columbia Bank
133 Route 9 South, Marlboro
NJ 07726, United States
Phone: +1 732-972-1777

What exactly is the Volcker Rule

Under section 619 of the Dodd-Frank Wall Street Reform of 2010, you will find the Volcker Rule. Under this rule, banks cannot trade derivatives, securities, and commodities for their account. A bank CEO must attest in writing that their bank is keeping to the rule. This must be done annually.

Yes, banks can trade under the Volcker Rule, but this is at their own risk and not at the risk of your money. They can engage in hedging, market-making, and currency trading.

When can a bank trade with your money

While a bank cannot trade with your money, it can trade on behalf of you. With your approval, the bank can act as an agent and trade for you. However, if such trading creates a conflict of interest, it cannot trade on your behalf.

This prevents you from losing your money unfairly in such a case. The bank also cannot act in ways that render the U.S financial system unstable.

What does the Volcker Rule do for you

It keeps your deposits safe as banks are allowed to use them for any high-risk investments. It also helps small local community banks and gives local businesses a chance to earn and not be wiped out by larger banks.

With the Volcker Rule in place, you know that your money is safe. Your bank will not be able to use any of your funds for purposes other than the ones you specify.