Volcker Rule and Dodd Frank effect on comp

What is the effect of the Volcker Rule and Dodd Frank on the expected future cash flows of a career in bulge bracket trading? Please explain to me which desks are most effected by the new regulations and what is the compensation outlook for those desks.

The Volcker Rule and FX

This is targeted to salesman and traders already working at a bank. So the volcker rule bans prop trading of "financial instruments" in investment banks and elaborates on its definition of a financial instrument. It then lists some things that are not financial instruments and includes "Foreign Exchange or currencies" in this group.

Volcker Rule - Impact on non US banks

hi with this advanced stricter volcker rule any one able ot tell me what might be the impact in the prop business of the non US banks. is trading on sell side going to become extremely boring and shitty?

Volcker Rule Clarification

So I understand that the Volcker Rule restricts banks from prop trading with FDIC insured capital/deposits (HF, Private Equity, etc.), but what if a bank uses non-deposit money? For example, capital raised from its own equity or debt, investor funds, profits, are these all part of the 3% exception?

Have banks gotten rid of their prop desks yet?

There's been discussions on this but all of them are pretty dated now. Have the bulge bracket banks already gotten rid of their prop desks? Or have they figured out a way to skirt around the Volcker rule?

Rethinking Occupy Wall Street

I thought of Alexis Goldstein as just another disgruntled employee from the world of finance, but she’s not. She had worked for Morgan Stanley, Deutsche Bank, and elsewhere, and is now a member of the Occupy Wall Street movement. Ms Goldstein shares her distaste for Wall Street and her devotion to the OWS movement in an article she recently wrote for n+1 Magazine:
 

Quote:
It is hard to contrast the joy of community I feel at Occupy Wall Street with the isolation I felt on Wall Street. It’s hard because I cannot think of two more disparate cultures. Wall Street believes in, and practices, a culture of scarcity. This breeds hoarding, distrust, and competition. As near as I can tell, Occupy Wall Street believes in plenty. This breeds sharing, trust, and cooperation. On Wall Street, everyone was my competitor. They’d help me only if it helped them. At Occupy Wall Street, I am offered food, warmth, and support, because it’s the right thing to do, and because joy breeds joy. 

I was privileged enough to make it in the door on Wall Street, and to get bonuses during my time there. But I never felt as fortunate, or joyful, as I did the night after the eviction of Occupy Wall Street from Liberty Square, when we had our first post-raid General Assembly. When the thousands of supporters who filled the park necessitated three waves of the people’s mic. When our voices together echoed not just down the park, but up into the sky as the buildings caused the sound to ricochet off their glass walls. 


One glaring question is not addressed in Ms. Goldstein’s article: What does the Occupy Wall Street movement believe in? What are its core principles?

Not Too Big to Fail

On the surface, the Volcker rule makes sense. The government should not let the banks run free, doing whatever they wish to do, endangering other people's money with risky proprietary trades that are made with the expectation that they, the federal government, will swoop in and save the day when those trades don't work out. The notion that banks should be deregulated when things go well and regulated when the bad debt of these financial institutions is raging out of control is both inconsistent and disingenuous.

Bruno Iksil: Lord Voldemort

JPM's Bruno Iksil is cooking up a storm over the large credit derivative positions he's taking. Some say his bets violate the Volcker rule and are shifting the entire index.

Bloomberg wrote:
The trader became such a big client of credit-derivatives dealers that some started calling him Voldemort, the Harry Potter book-series villain so powerful he simply was referred to as “He Who Must Not Be Named,” said one fund manager

But as this is in London, the Volcker rule doesn't apply. Does this put the US at a disavantage if the Volcker rule is implemented? Are Iksil's bets ethical? Or are they just downright stupid? Rogue-trader in the making?

I'm only a trader on my personal account and I'm interested in knowing more about this. Anyone on this market?

Volcker Rule Against the Ropes

I guess it was a just a matter of time (and hundreds of millions of lobbying dollars), but now that the laser focus on banker misdeeds seems to be waning, lawmakers are signalling their willingness to dump the Volcker Rule forbidding prop trading at investment banks. So I guess the joke's on those banks who've already divested their prop trading arms.

Realizing they were dealing with dullards, the banking lobby dumbed their arguments down as much as possible so that Congress could understand them. They even went so far as to create the "Volcker Rule for Dummies":

Quote:
The Financial Services Forum and the American Bankers Association circulated a 14-page presentation on the rule’s consequences to aides on the House and Senate banking panels. Sort of a “Volcker Rule for Dummies,” it compared Wall Street market- making to how Amazon.com Inc. manages inventory for the Christmas rush.

What Is The Volcker Rule?

The Volcker Rule is a subsection of the Dodd-Frank act (named after former Fed Chairman Paul Volcker), which attempts to limit the risky, speculative trading activities of hedge funds and investment banks.

The Volcker Rule limits banks to only investing 3% of their total capital in prop trading and to reduce the exposure of banks to hedge funds.

Prop trading at investment banks has been particularly hard hit by the Volcker Rule, and many banks are closing or massively reducing their prop trading desks.

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