A new report from JPMorgan Chase’s British investment bank in London, JPMorgan Cazenove, states that Dodd-Frank regulations could “encourage big European banks to steal business from their United States rivals,” writes the New York Times. (Related Article: JPMorgan on Durbin: Customers ‘May Be Pushed Out of the Banking System”)
The report states European investment banks, such as Barclays and Deutsche Bank, would benefit from Dodd-Frank, while Goldman Sachs is likely vulnerable to the most risk due to the Volcker Rule’s limits on proprietary trading.
“The opportunities arise from Dodd-Frank provisions that force banks to spin off some derivatives business, halt proprietary trading and wind down their investments in hedge funds,” reports the New York Times.
Foreign banks with U.S. subsidiaries that have deposits backed by the federal government would have to adhere to the new Dodd-Frank regulations. The JPMorgan report also stated that while European banks are subject to stringent limits on momentary perks for executive, which could hamper their recruitment processes, Dodd-Frank regulation presents a more significant challenge to Wall Street’s revenue stream.
Click here to read the full report from JPMorgan.
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