Theme: Proprietary Traders – then and now

Proprietary traders – then and now

  • The Volcker Rule’s ban on proprietary trading ignores the fact that no bank required a bailout due to proprietary losses; on the contrary, our analysis shows that prop desks of Top 13 banks made a strong positive contribution to banks’ revenue during FY07-FY10.

  • In this note, we look at ex-prop traders that have struck out on their own: the majority of them have done very well indeed, even without the support from their megabank employers.  To us, this suggests that the Volcker Rule weakened banks without strengthening the system.

Proprietary Traders - then and now