Wall Street banks, which already shut proprietary trading units that helped fuel record profits, are girding to learn next week how much revenue the Volcker rule may cut from the $44bn they say comes from market-making.
Bloomberg reports that with U.S. regulators scheduled to vote 10th December, the largest firms are getting little detail about the final terms of the Volcker rule’s ban on proprietary trades, and still have basic questions about what kind of market-making will be allowed, said three senior U.S. bankers. They’re also wondering whether they’ll have to change practices or curtail business in some less-liquid markets, the bankers said.
The answers could threaten their revenue and affect transaction costs for clients of firms such as JPMorgan, Bank of America and Goldman Sachs. The Volcker rule is close to being adopted more than three years after it became a centerpiece of the 2010 Dodd-Frank Act, designed to prevent a repeat of the global credit crisis.
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