Bank Of America Merrill Lynch To Lay Off Up To A Third Of Prop Traders

CNBC reports that a spokesperson for Bank of America Merrill Lynch has confirmed that the firm is to lay off up to 30 of its prop traders, around 30% of the total, as the bank moves to ensure compliance with new US regulatory requirements.

The bank told the business channel: 'We continue to explore the best possible ways to comply with the Volcker rule, and this is one step in that direction'.

JPMorgan is also transitioning across its prop trading unit into asset management, although this process is likely to take some time to achieve. Around 80 jobs are likely to go as a result.

Some prop traders affected by the new regulatory regime will, of course, end up at hedge funds. And they might even do as well as David Harding, the founder of Winton Capital Management, who, according to The Daily Telegraph, made a cool $85m in dividends last year after his firm did well from successful punts predicting the swings in commodity prices.

In the meantime, The Financial Times reports that Goldman CEO Lloyd Blankfein warned Europe that it needed to ensure that its financial regulation wasn't out of step with that in place in other regions around the world.

Speaking at a conference in Brussels, Blankfein warned against 'mismatched regulation', and pointed out that 'operations can be moved globally and capital can be accessed globally'.

Finally, The Wall Street Journal reports that UBS has come out and confirmed that it will satisfy the Basel III capital rules through retained earnings by 2013. Bank CFO John Cryan has said that this will mean that 'we do not expect to be able to pay dividends for some time to come'.

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