Bank of America is shutting down a bond prop trading desk, Bloomberg wire services reports.A team headed by Scott Brown, with about 15 traders, will leave the bank at the end of June.
Star traders Steve Padovano, head of credit derivatives at Merrill Lynch, and Srini Dhulipala, co-head of credit investing on Merrill’s prop trading desk “may depart.”
The liquidation of the bond prop trading unit is part of BofA’s effort to comply with the Volcker Rule, according to Bloomberg.
Goldman Sachs, JPMorgan and Morgan Stanley, in addition to BofA, are shutting prop desks to comply with Fin Reg.
(That doesn’t mean that they’ve shut down the practice of trading with the bank’s cash altogether — they’ve just figured out how to get around the Volcker loophole: shut down the prop desks and use client-based units to trade the bank’s capital).
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