Final answer:
The Volker Rule restricts banks' investments in hedge funds and private equity funds as part of bank regulation to avoid excessive risk and maintain solvency. It also prohibits banks from engaging in proprietary trading.
Step-by-step explanation:
The Volker Rule is a regulation that restricts banks' investments in hedge funds and private equity funds. It is an important component of bank regulation aimed at avoiding excessive risk and maintaining the solvency of banks. The rule prohibits banks from engaging in proprietary trading, which refers to trading securities for their own profit instead of on behalf of clients.