U.S. banks would be able to take large ownership stakes in venture capital funds under proposed rules unveiled by the Federal Reserve. The Volcker Rule was aimed at curbing risky bank activity in the wake of the financial crisis, but the proposal marks the second time regulators under the Trump administration have sought to relax those standards in response to industry complaints it is too complex and restrictive.
Banks are already permitted to invest in startups while meeting certain requirements, and agency officials said the rule inadvertently prevented banks from investing in such endeavors through funds.