- "The Volcker rule is not a game-changer for Morgan Stanley (MS +1.6%)," says Mike Mayo of his top bank pick. "I'm not the least bit worried Morgan Stanley hasn't adjusted." Risk in fixed income trading is just 25% of what is used to be, says Mayo. Assets in that business are one-third less and revenues one-half less. "They've already downside and contained fixed income trading ... Perhaps getting rid of the uncertainty could be a positive catalyst."
- Bank CEOs have been "put on notice," says Mayo of the new rule. "They can't have a casino inside the bank." Conceding loopholes are sure to be found, Mayo says the rule will at a minimum enforce accountability - maybe meaning a quick exit for any CEO whose bank suffers a sizable loss.
Mayo: Banks (especially Morgan Stanley) have already adjusted for Volcker
Dec 10 2013, 15:35 ET