CHARLOTTE, N.C., Aug 6 (Reuters) - Bank of America Corp is considering options for its proprietary trading desk that include a sale of the business as the bank prepares for U.S. regulatory changes, the Wall Street Journal reported on Friday.
The Charlotte, North Carolina-based company would become the latest major U.S. bank to consider a spin-off or sale of its proprietary trading operations, which it is barred from owning under the new financial reform bill passed by the U.S. Congress this July.
Buyers of the business could include private equity or hedge fund firms, the Journal reported.
A Bank of America spokeswoman said the company had no comment.
Known as the Dodd-Frank Act, the reform bill includes the so-called Volcker Rule, named after former Federal Reserve Chairman Paul Volcker.
The rule bars banks from placing market bets backed their own capital, known as proprietary trading. The business has become a key source of profits for Wall St. banks.
In the months leading up to the reform bill's passage, Bank of America executives said their proprietary trading business was far smaller than some of their Wall Street rivals, and the Volcker Rule would have little impact on it.
Also under the rule, the bank is barred from investing more than 3 percent of its core capital in hedge funds or private equity investments.
As of June 30, Bank of America had $6.4 billion in private equity investments, above its 3 percent cap of $4.7 billion. The bank has since shed some of its private equity assets.
(Reporting by Joe Rauch; Editing by Richard Chang) Keywords: BANKOFAMERICA/PROPRIETARY (joe.rauch@thomsonreuters.com; +1 704 692 5885; Reuters Messaging: joe.rauch.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The Charlotte, North Carolina-based company would become the latest major U.S. bank to consider a spin-off or sale of its proprietary trading operations, which it is barred from owning under the new financial reform bill passed by the U.S. Congress this July.
Buyers of the business could include private equity or hedge fund firms, the Journal reported.
A Bank of America spokeswoman said the company had no comment.
Known as the Dodd-Frank Act, the reform bill includes the so-called Volcker Rule, named after former Federal Reserve Chairman Paul Volcker.
The rule bars banks from placing market bets backed their own capital, known as proprietary trading. The business has become a key source of profits for Wall St. banks.
In the months leading up to the reform bill's passage, Bank of America executives said their proprietary trading business was far smaller than some of their Wall Street rivals, and the Volcker Rule would have little impact on it.
Also under the rule, the bank is barred from investing more than 3 percent of its core capital in hedge funds or private equity investments.
As of June 30, Bank of America had $6.4 billion in private equity investments, above its 3 percent cap of $4.7 billion. The bank has since shed some of its private equity assets.
(Reporting by Joe Rauch; Editing by Richard Chang) Keywords: BANKOFAMERICA/PROPRIETARY (joe.rauch@thomsonreuters.com; +1 704 692 5885; Reuters Messaging: joe.rauch.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.