In the aftermath of the financial crisis, the Obama administration has been trying to bring in measures to avoid a similar crisis in future. In another such effort, the administration has proposed a bill that would reduce risk taking by large financial companies.

The bill aims to ban financial companies from involving in risky trades for the benefit of the company itself. This kind of trading, known as proprietary trading, is done to make profits for the bank and not for its customers. The bill would also prevent banks from investing in hedge funds and private equity funds. However, all these rules would apply only on companies that use federally insured deposits. [Read more…]