Bank of America (BofA) is to shut a proprietary bond trading desk, a news report has revealed.
According to Bloomberg, which quoted three people familiar with the matter, the team of 15 traders is expected to be closed before the end of June.
Top traders such as Steve Padovano, head of credit derivatives at Merrill Lynch and Srini Dhulipala, co-head of credit investing, are among those executives who could potentially leave BofA.
The unit is being shut to comply with new banking regulations implemented as part of the Volcker Rule in the Dodd-Frank act.
Named after Paul Volcker, former chairman of the US Federal Reserve, the law prevents banks from making too many speculative investments with their own money.
Many commentators believe it was this sort of banking which created risk and instability within the financial sector and brought on the global crash.
In a statement, which was quoted by the Wall Street Journal, the bank said: “We continue to explore the best possible ways to comply with the Volcker rule and this is another step in that direction.”
Goldman Sachs and JPMorgan are among BofA’s rivals to have taken similar action.
By Jim Ottewill
