Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis — and Themselves

by Andrew Ross Sorkin

Banks were forced out of the game of trading for themselves as a result of a controversial new rule in Dodd-Frank named for Paul Volcker, the former chairman of the Federal Reserve. “Banks will no longer be allowed to own, invest in, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers,” President Obama said when announcing the rule. “If financial firms want to trade for profit, that’s something they’re free to do. Indeed, doing so—responsibly—is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people.”