Charlie Gasparino’s latest report points to more implications for big banks outlined in the Volcker Rule.
According to his sources, banks are saying the way the Volcker Rule is currently written may require them to sell off all their hedge funds and private equity accounts, even those where firm money doesn’t exist. The rule will likely have the greatest impact at JPMorgan Chase (JPM) which owns One Equity Partners, a private equity arm with billions in assets, and Highbridge Capital, a hedge fund subsidiary with $20 billion in assets.
FBN: “Several weeks ago a senior JPMorgan executive, responding to a report on FOX Business about the potential negative impact of the Volcker Rule on the firm, said the proposal would have almost no bearing on the bank’s private equity and hedge fund business because JPMorgan merely manages these funds for clients.
Now, the firm is changing its tune. A spokeswoman for the firm concedes that the rule’s near-final language leaves the impact vague, and may indeed force a spin-off of these businesses. “The interpretations of this rule change by the week and different lawyers say different things,” said spokeswoman Mary Sedara. “The language as it is now written isn’t definitive.”
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