Proprietary trading conundrum
With implementation of the Dodd-Frank Act due to start next year, Alex Davis examines how the commodities markets stand to be affected by the Volcker rule
Both commodity desks at investment banks and other commodities markets participants are no closer to understanding just what the fallout will be both on the markets and their business from this very simple line, included in the Dodd-Frank Wall Street Reform and Consumer Protection Act in July – ‘a banking entity shall not engage in proprietary trading'.
The so-called 'Volcker rule' stipulation was created by 82-year-old former Federal Reserve chairman Paul Volcker to prevent banks speculating in
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