The Mystery of Disappearing Proprietary Traders: Michael Lewis
October 4, 2011
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I have been busy recently writing a piece about the Volcker rule and comparing it with the Vicker’s approach in the UK. Both try to restrict prop trading, but go different ways. The Volcker rule first bans all prop trad, but then states a lot of exemptions. The UK approach is to define retail services, as well as prohibited trading services, but using different criteria from the US approach. Anyway, Michael Lewis wrote this nice piece for Bloomberg some time ago, that I picked up thanks to FT’s Alphaville today. Lewis thinks that big banks are just shifting their traders onto their customer desks, where they will continue doing the same as before, but under a different name. An as you might expect, customer trading is permitted under the Volcker rule.