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0 pointskranner7y ago0 comments

Investment banks have proprietary trading desks that are effectively hedge funds.

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7 comments · 2 top-level

ryeguy_247y ago· 4 in thread

I don’t think this is accurate. Regulators release the Volcker Rule to shut down prop trading at banks.

The Volcker rule contains exemptions for certain prop trading activities. For example, trading in US government bonds is exempt.

rbavocadotree7y ago

Here's nice flowchart[0] to determine what counts as proprietary trading. There is a surprising amount that is still allowed.

https://www.davispolk.com/files/DavisPolk_Final_Volcker_Rule...

govg7y ago

There still exist principal investing groups, as well as market making groups that can contribute to the bottom line.

ryeguy_247y ago

Right. They have tons of trading activities that are non-proprietary. I’m sure they can always hide some positions that are truly proprietary but largely they are not supposed to put on positions for their own gain.

jen207y ago· 1 in thread

GS used to be nicknamed “the worlds largest hedge fund”. They have plenty of world class proprietary tech, but the OP is right: this is not likely to be secret sauce at all.

JackFr7y ago

That's Harvard's endowment. Harvard University itself exists at this point merely as a tax dodge for the $37 billion AUM hedge fund.

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