Tuesday, October 24th, 2017

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New Rule Could Send Trading Jobs Abroad

Wall Street could lose some of it's most profitable positions.Some of the highest paid and prestigious positions on Wall Street could soon be disappearing with the implementation of some of last year's Dodd-Frank reforms, according to Bloomberg.

The news source reports that the Volcker Rule, which seeks to reduce the kinds of risks banks take, could ultimately be applied even to foreign institutions that have operations in the U.S. The Volcker Rule works by preventing banks from investing for their own profit, a practice known as proprietary trading.

As it stands, many banks have closed their proprietary trading desks in anticipation of the rule that effectively ends the business model. Some foreign institutions, particularly those trading non-U.S. assets, have held off in hopes they might receive an exemption. As it stands, however, the five regulatory agencies seem inclined to push the rule to its broadest interpretation.

This move could send a number of jobs from the U.S. elsewhere, since nothing in particular limits where these traders must be located other than access to financial markets and the local regulation.

The Financial Times notes, however, that the current draft of the rule might not entirely kill proprietary trading, as a possible exemption exists for repurchase agreements.

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