Volcker rule has everybody on Wall Street scrambling -- even though it hasn't yet become law and won't effect some banks for years.
Reform bill final vote will be next week in the Senate and Banks are shuffling star proprietary traders, whose roles could be put in jeopardy by the reform, according to The Wall Street Journal. Volcker rule will prevent banks from wagering their own money.
Citigroup considering moving traders onto desks that trade with clients, while other firms have moved them to customer-focused operations.
But all this shuffling could just be Wall Street-style smoke and mirrors. At some banks, prop traders are doing what they always did, just from different trading desks. At Morgan Stanley, one trader whose desk was shut down now trades using money from a desk that serves clients. At Deutsche Bank, another trader bets with the bank's money, just on a client trading desk.
Meanwhile, clients are wary about prop traders moving to desks where they can see customers' investment strategies -- and possibly steal customers' ideas for their own profit.
However, firms may be moving a little too fast: Under the reform, many banks, including Goldman and Citigroup will have till 2022 to comply with the Volcker rule. This summary courtesy of FINS.com.