Banks shouldn't be hedge funds, Volcker tells Senate

The federal safety net for commercial banks should protect depositors, not speculators; former Federal Reserve Chairman Paul Volcker told senators on Tuesday, urging them to pass the so-called Volcker Rule that would ban banks from trading for profit and that would restrict the size of the biggest banks.

Volcker said only four or five U.S. commercial banks and only a couple dozen worldwide engage in the kind of risky proprietary trading that would be banned by the Volcker Rule. He didn't name them, but the firms likely on the list would include Bank of America, JP Morgan, Citigroup, Goldman Sachs and Morgan Stanley http://www.marketwatch.com/story/banks-shouldnt-be-hedge-funds-volcker-testifies-2010-02-02?dist=afterbell  

Impact on Indian market: Indian market has seen continuous selling from FIIs in secondary market after positive inflows from them from March 2009 for 10 continuous month now January 2010 has seen negative flows to the tune of Rs.1136crs as per data but their selling in secondary market has been on higher side while QIP and IPO still attracting the flows so there has been no major outflow from the country and with Government disinvestment programme we need to see FIIs interest in that. http://www.moneycontrol.com/news/fiimf_activity/activity.php?flag=FII

DB Realty $325 mn IPO subscribed 3 times

http://www.bloomberg.com/apps/news?pid=20601087&sid=agQli9YNJWsQ&pos=6  Morgan Stanley is “evaluating” its investments in hedge funds including FrontPoint Partners LLC and London-based Lansdowne Partners LP, Chief Executive Officer James Gorman said today at an investor conference.

Treasuries fall on Speculation Lawmakers May Dilute Bank Rules

Treasuries fell for a second day on speculation U.S. lawmakers will dilute President Barack Obama’s Volcker rule restricting U.S. financial institutions, easing concern the proposal will crimp the economy lessened.

http://en.wikipedia.org/wiki/Paul_Volcker  Paul Adolph Volcker (born September 5, 1927) is an American economist. He was the Chairman of the Federal Reserve under United States Presidents Jimmy Carter and Ronald Reagan (from August 1979 to August 1987). He is currently chairman of the newly formed Economic Recovery Advisory Board under President Barack Obama.

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