CHRISTOPHER RUGABER
AP Economics Writer
WASHINGTON (AP) — The Federal Reserve approved a proposal Thursday to loosen a financial-crisis era rule that prevents banks from investing in venture capital funds.
The proposal would affect the so-called "Volcker Rule," which was created after the 2008 financial meltdown. The rule bars banks from trading with government-insured deposits in an effort to prevent the kind of excesses that led to the financial crisis and Great Recession. Thursday's proposal would clarify several aspects of the rule and follows a previous loosening of the Volcker Rule last fall.
The draft rule would exempt venture capital funds from the Volcker Rule's provision that bars banks from investing in hedge or private equity funds.
The proposal was approved by the Fed'
