BofA to make redundancies on proprietary trading desk

1 October 2010

Bank of America (BofA) is making job cuts to its proprietary trading desk, news reports have claimed.

According to an unnamed source close to the matter, between 20 and 30 positions in the department are expected to be cut in response to new legislation passed by the US government earlier in the year.

The source told the New York Times that the unit had been profitable and the cuts were not based on its performance.

Jobs are expected to be cut at a number of locations including New York and Hong Kong and will account for an estimated third of the proprietary-based workforce.

The new restrictions are part of the Volcker Rule, a piece of legislation named after former chairman of the Federal Reserve, Paul Volcker.

As part of the new rule, restrictions will be put in place to restrict banks using their own capital from making speculative investments which could expose institutions to unnecessary risk.

BofA’s move follows news of further upheavals on proprietary trading desks at other major financial institutions.

Earlier in the week, JPMorgan announced that many of its proprietary trading team will be moved to its asset management unit in reaction to the forthcoming legislation.

By Jim Ottewill

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