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Michael Lewis on Hiding Banned Proprietary Trading at 'Too Big To Fail' Firms

An update from author Michael Lewis on how the Too Big To Fail firms (e.g., Goldman Sachs) are maneuvering around what clearly appears to be an ineffective ban on proprietary trading. Lewis:

"A few weeks ago we asked a simple question: Why are the same Wall Street banks that lobbied so hard to dilute the passages in the Dodd-Frank financial overhaul bill banning proprietary trading now jettisoning their proprietary trading groups, without so much as a whimper?

The law directs regulators to study the prop trading ban for another 15 months before deciding how to enforce it: why is Wall Street caving now?

The many answers offered by Wall Street insiders in response boil down to a simple sentence: The banks have no intention of ceasing their prop trading. They are merely disguising the activity, by giving it some other name."

I highly recommend Lewis' recent book The Big Short which I wrote previously about here.