Morgan Chase said to end proprietary trading in commodities

Section:

If Morgan Chase has been trading for Fed or Treasury accounts, this will mean nothing. But maybe it will slow up any investigation of the Morgan Chase silver market rigging in London.

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JPMorgan Said to End Proprietary Trading to Meet Volcker Rule

By Dawn Kopecki and Chanyaporn Chanjaroen
Bloomberg News
Tuesday, August 31, 2010

http://www.bloomberg.com/news/2010-08-31/jpmorgan-is-said-to-shut-propri...

NEW YORK -- JPMorgan Chase & Co., the second-largest U.S. lender by assets, told traders who bet on commodities for the firm's account that their unit will be closed as the company begins to shut down all its proprietary trading, according to a person briefed on the matter.

The bank eventually will end all proprietary trading to comply with new curbs on investment banks, said the person, who asked not to be identified because JPMorgan's decision isn't public. The New York-based bank will shut proprietary trading in fixed-income and equities later, the person said.

... Dispatch continues below ...



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Closing the prop trading desk for commodities affects fewer than 20 traders, including one in the U.S. and the rest in the U.K., the person said. The unit is based in London, where traders on Aug. 27 were given notice, as required by U.K. law, that their jobs may be in jeopardy, according to the person.

Congress passed curbs on financial firms this year designed to prevent a recurrence of the 2008 credit crisis, which almost caused the banking system to collapse. Proprietary trading involves transactions made on behalf of the bank rather than its customers. The curbs on proprietary trading are known as the Volcker rule, named after former Federal Reserve Chairman Paul Volcker, who campaigned for limits on risk-taking by lenders.

Traders will be given a chance to apply for jobs elsewhere in the company, according to the person. JPMorgan spokeswoman Kimberly Weinrick declined to comment.

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