Bank of America Corp (BAC)

[KING_TRADER$]

Rule that curbs bank risk-taking nears approval

http://www.cnbc.com/id/101259452

Volcker Rule, will set for vote tomorrow. Drafted in 2010, until now due to disagreements/postpone. The rule's main objective is to draw the line between everyday banking & hedging over the margins of trading. The rule is to push bankers to be more specific /identifiable towards their hedge trading. If passed, this should be effective in 2015. I'm sure you all still remember JPMorgan's $6b trading losses due to poorly managed, executed, monitored. Hopefully this'll put some check/balance in our banking sector's security trading to not post a treat to our economy. Currently, it seems like Goldman Sachs, Morgan Stanley, Citigroup, JPMorgan will be the most effected.

Goldman Sachs being the most of all, generates about 50% their revenue from trading w fixed income, currency, commodities doing 30%. The other 20% from lending/investing. With the Volcker rule, it should forced GS to reduce that 50% to 25%.

Analyst predict with the vote in favor with Volcker Rule. Hedged trading will still be allowed, but more documentation/monitoring of the trades will be required.

I read somewhere that BofA only generates 10% of their revenue from hedge trading. They and Wellsfargo are the least affected. But I could be wrong if the #s have changed and that source article isn't reliable.


GLTYA.