Companies designated non-bank SIFIs, are not subject to the Volcker Rule, although they could be forced by the Fed to increase their levels of capital.
Gardner wrote that "Goldman Sachs would be most affected, followed by JP Morgan, Bank of America, and Citigroup."
Paul Hastings Global Banking chair and partner V. Gerard Comizio believes large U.S. banks could decide to significantly transform their businesses. "One potential impact of this rule may be a new strategy to push proprietary trading offshore in joint ventures and spin-offs; you may even have large banking entities exploring the legal possibilities of spinning off their investment banking operations outside the reach of the Volcker Rule," he says.
"The battle for those opposed to the rule may well shift to an ongoing interpretive skirmish over the Volcker rule exceptions for market making, hedging and private equity deals," he adds.
-- Written by Philip van Doorn in Jupiter, Fla.
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