Analysis: Volcker pay curbs spark fears of Wall St. exodus
Dave Clarke (Reuters)
October 26, 201

“The Volcker rule has created a new battlefield over Wall Street pay that banks fear will send their star traders and hedge fund advisers fleeing. The roughly 300-page proposal that was released earlier this month is fuzzy at best, but it makes clear that banks cannot pay their in-house top talent any type of bonuses that could encourage proprietary trading. Proprietary trading, which includes speculative bets banks make with their own capital, would be banned under the rule, while trades for client interests would still be allowed. The idea of rolling up pay with the enforcement mechanism is unlikely to elicit much sympathy from an American public still smarting over big payouts on Wall Street while unemployment is at painfully high levels. However, it is sending chills through banks who fear they may lose key talent. … ‘The question is whether just saying that compensation arrangements cannot encourage proprietary risk taking is enough or whether they have to be more specific,’ said Marcus Stanley, policy director for the group Americans for Financial Reform.” Click here for more.