The Volcker Rule Restricts Excessive Risk Taking by Commercial Banks

question 78

Multiple Choice

The Volcker rule restricts excessive risk taking by commercial banks by:

• A) prohibiting banks from making certain kinds of speculative investments.
• B) increasing the amount of capital banks must hold.
• C) decreasing the deposit insurance coverage of depositors in commercial banks.
• D) limiting the compensation that bank executives can be paid.

---

Definitions:

Promoter

An individual or company responsible for organizing and financing the initial operations of a business venture or organizing events, often taking significant financial risks.

Incorporation

The process of legally declaring a corporate entity as separate from its owners, providing protection from personal liability and other benefits.

Accounting Services

Professional services involving the management of financial records, including bookkeeping, auditing, and preparation of financial reports.

Automatic Novation Clause

A contractual clause wherein all parties agree to automatically substitute a new contract or contractual obligation for an old one.