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How could the Federal Reserve board's proposal on the Volcker Rule change the influence of foreign investors in venture capital?

The Federal Reserve board has put forward a proposal that would ease banks' trading restrictions, including permitting banks to invest in venture capital firms. We have extensive experience in our home country with venture capital and we would like to know how this proposal might influence foreign institutional investors.

  • SPC Advisors, LLC
    June 25, 2018

    I remember the original Volcker Rule as well as the original. In each case, the concept is to prevent banks from doing trading or an investment bank business. This iteration also limits investments by banks to a smaller percentage of investment funds than was previously the case. It didn’t stop banks, which grew to include Goldman Sachs and Morgan Stanley from offering funds; it just reduced the amount of their investment in such funds. The rule enabled Blackstone and Brookfield to grow with less competition of scale. When repealed, there may be additional players, but the investment market is already crowded. It will have less of an effect on single projects and more in portfolios.