In the July 26 issue of the New Yorker, John Cassidy has an article called "The Volcker Rule." This is a good overview of the financial reform legislation and how it came about. For instance, catch this little detail:
As the deliberations on Capitol Hill extended through the night of June 24th, the financial lobby exacted several more concessions, including a change in the definition of the three-per-cent limit on investments in hedge funds and private-equity funds. To outsiders, the switch in language from “tangible common equity” to “Tier 1 capital” signified nothing. For the banks, it meant that they could increase by up to forty per cent the amount of money put into risky investment vehicles.
Apparently the devil is in the details.
One of our Pennsylvania congressional representatives, Paul Kanjorski, gets a mention:
On Christmas Eve, he had a long working lunch in the West Wing with Geithner and Summers, both of whom sensed that it was time for a policy switch. The financial-reform bill that had passed in the House in early December included an amendment from Paul Kanjorski, a Pennsylvania Democrat, giving the Fed the power to order individual banks to cease certain activities, including proprietary trading, if they were taking too many risks.
The article is lengthy but worth reading.