FINREG and Prop Trading...
http://www.cnbc.com/id/37921692
I don't know if I could say that Wall Street will LOVE the 3% capital cap allocated to prop trading activities. I don't believe I can say I love anything about this bill, thus far. But banks will be restricted to engage in prop trading activities - but to what extent? Are there any figures out there showing how much banks currently allocate to prop trading? I would hypothesize, that if this number were large and trading was significantly cut from banks, a greater opportunity would be presented to the private prop shops as a small market maker. Again, I do not know to what extent of the average traded volume on exchanges is attributed to prop trading activities, but is it possible that this could open up market inefficiencies (to a very small degree)?
All in all, these proposed restrictions would certainly choke out the capital markets. As the private sector takes over a larger share of these trading activities in the market, is there a disguised hope for the private Proprietary Trading firms out there?
Throw in your 2¢
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