This is my first post; I'll try to keep it brief.
I'm trying to develop a more comprehensive view of Dodd-Frank and the impact it's having on the street.
I have the same rudimentary grasp as the next guy, but I'm hoping to get to be somewhere between lay and lawyer-level understanding (just to sate my curiosity).
If someone can answer this specific question, it's what spurred my post to begin with: What the hell is going on wrt prop trading? Volcker rule was obviously was designed to curtail it... but are there knock-on effects any of you guys have experienced? Obvious one would be brain drain at BBs... but have any of you big traders/dealers experienced any problems with liquidity as a consequence of this? Or is the dealer business still perfectly intact?
Extra grateful for anyone pointing me towards quality resources, or if you can recount personal experience with the regs' impact.
TLDR: Has Dodd-Frank fucked up (or improved?) the work that you do/experience on a daily basis?
bump. Interested as well. Great topic
hedges are held long-term and sometimes met the legal definitions of "prop" holdings, posing a problem. the volcker rule also prohibits banks from possessing certain categories of assets anywhere (including as hedges), like funds originated in certain european territories that aren't available to retail investors. the idea is that if they aren't incorporated a certain way and available to average joes that they're "dangerous." last summer before the volcker rule went live every desks' books had to be combed (the system was terrible, bloomberg was supposed to provide a solution for maximal possible funds but fell through, so some banks hired consultants to run the legal logic manually) and some positions were liquidated, sometimes leading to losses and increased risk. there are so many possible funds that people are still trying to automate the logic that will instantly tell a trader if they're allowed to buy things when they try.
why are you interested in this? most people consider it a back office issue.
bump
Dodd-Frank / Volcker rule impacts on Canadian bank prop desks (Originally Posted: 02/26/2012)
I'm having difficulty finding relevant info on how the large Canadian banks will be impacted by the new legislation. Does anyone have any insights or sources?
If you can't comment on Canada specifically... do you really expect the Volcker rule to pass and force prop desk shutdowns in the US?
Pretty sure all Canadian banks got rid of whatever prop desks they had because of this lesiglation as a sort of precautionary measure
Why would you pretend to know anything and say something that's so ridiculously wrong?
GAT (Global Arbitrage Trading) at RBC is pretty much a full floor in New York and they are completely focused on Prop.
abc
interested
very interested as well
I can speak to CIBC and CS in Canada. CIBC got rid of their prop desk but they still have liability trading. CS moved their prop guys to New York.
RBC still has a large prop group, though they are mostly in NYC.
NBF is spinning (or already spun?) out their prop group.
CS moving their guys to NY has nothing to do with regulation.
TD's prop group, at least the credit guys, blew up in 2008..not sure what they've done with it since.
Very interested in this. Goes beyond Canadian banks, really applies to all non-US headquartered banks.
I'm not a lawyer or anything, but just remembering back to the uproar when DB and Barclays tried to de-bank in the US, my understanding is that if you own any US banking entity the Volker Rule applies if you want to play in US markets.
Really would love to hear from someone with deeper knowledge of the legal plumbing.
Volcker Rule and Dodd Frank effect on comp (Originally Posted: 02/23/2014)
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.
Interested in this as well. A lot of people on this board just use the blanket phrase "regulation is hurting S&T" but then never care to explain any of it. Especially interested in hearing how each desk is affected specifically.
Please please please can we get comments from actual industry insiders as opposed to wanna-be prop traders who think they know everything about the industry. Also, comments from people who have spoken to folks in the industry and are DIRECTLY QUOTING them would be great.
Just to add my $0.02, I had Superdays for BAML and JPM (Accepted JPM S&T) and was told by MDs that no one really knows exactly what Volcker is going to do to them.
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