Global Investment Bank
Volcker Rule

Volcker Rule
Separation of Proprietary Trading

Client Challenge

  • The client was required to meet regulatory mandates as set forth by the Dodd-Frank Act to separate proprietary trading from their agency business, from owning or investing in a hedge fund or private equity fund, and setting thresholds on the amount of liabilities a bank could carry on their balance sheet.
  • As a global investment bank, the client had numerous legal entities that engaged in the proposed banned activities and carry liabilities in excess of what they could hold as part of the rule. The client needed to plan to separate, spin off, relocate or close various lines of businesses that engaged in these activities.
  • As the final publication of the pending legislation had not been finalized and published, calculated assumptions were made in order to allow for ample time to complete planning, analysis and execution.

Our Approach

  • Established a Project Management Office, working groups, and steering committee project governance model to manage project oversight from the various workstreams, fostered decision-making for all related activities, as well as ensure synergies with other Dodd Frank regulatory initiatives.
  • Led an inventory analysis of bank-owned assets across the firm globally. The goal was to quantify the value of the assets, the purpose for being on the balance sheet (investment vs. bona fide hedge) and potential timing of coming off the balance sheet.
  • Created multiple scenarios that were presented to senior management as options on how to proceed.
  • Represented the client during working group sessions with multiple industry groups that were coordinating inquiries and comments to the regulatory agencies.

Solution/Client Benefit

  • Client had a holistic view of the bank-owned investment assets.
  • Client was ahead of the curve in planning the various deployment and risk- mitigating strategies available in anticipation of the final regulation.

Gartland & Mellina Group — A Management Consulting Company