NEW YORK (TheStreet) -- The departure of JPMorgan's (JPM) global head of proprietary trading, Mike Stewart, to start up a hedge fund seems to show that new banking regulations may not be toothless afterall.
The Financial Times, which broke the story, described the exodus of Stewart and other members of his team as a setback for JPMorgan.
The story has been picked up by other financial media, which all took pains to label the defections as fallout from U.S. regulatory moves to limit proprietary trading under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Separately, Goldman Sachs (GS), began unwinding its investments in hedge funds to comply with Dodd-Frank's so-called Volcker Rule, which limits investments by banks, The Wall Street Journal reported today.
So even though the major banks continue to battle regulators over implementation of Dodd-Frank, it seems that the mere threat of a ban is enough.As TheStreet's banking analyst, Phil van Doorn, notes in his article today, JPMorgan is not alone among big banks that are starting to lose their best and brightest to hedge funds.Recent 10K filings by Morgan Stanley (MS) and Bank of America (BAC) all mentioned the impact of Dodd-Frank on their operations.It just goes to show that uncertainty about potential regulations can wreak more havoc than the regulations themselves.For good or for bad, the impact of Dodd-Frank is being felt. --Written by Glenn Hall in New York. Follow me on Twitter @GlennHall
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