Biotech could benefit from banks backing venture funds

Biotech-focused venture firms not located in coastal hubs could see a boost to their funds, thanks to a federal rule change that will now allow banks to invest in VCs.

The Fed and four other federal regulatory agencies eased rules that limit the ability of banks to invest in hedge funds and private equity funds, including those managed by VCs. The modifications to the Volcker rule, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, take effect Oct. 1...