In the runup to the vote on the financial reform bill, the big Wall Street banks squashed an attempt by Senator Carl Levin (D-Mich.) to pass a simple ban on any form of proprietary trading.
The final version of the financial reform bill restricts proprietary trading but allows big Wall Street firms to invest up to 3 per cent of their capital in their own internal hedge funds.
Yet in the past few weeks news has leaked that Morgan Stanley, JPMorgan Chase, and Goldman Sachs all intend either to close their proprietary trading units or to sell their interests in the hedge funds they control. Something is wrong with this picture. Why fight for a right, and win, only to proceed as if you have lost? Why take prisoners only to surrender to them?