As of today the business model described for the investment banks is dead dead dead!
Reader comment on: The Journal on the Volcker Rule
Submitted by Lyle (United States), Jun 24, 2010 01:15
Bear, Morgan Stanley, Goldman and Merrill Lynch are either financial holding companies or parts of bank holding companies to get access to the discount window. If you get access to the discount window it comes with gov regulation. In addition I would say that for prop trading you may only do it on a 100% capital basis, no playing with other people's money. If the other people want to play along they get to be equity investors and face the downside. Essentially in prop trading ban leverage.
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