RBC looking at spinning off prop trading units

Spinning top

The shape of things to come ?

Royal Bank of Canada is considering spinning off of parts of its proprietary trading business in a move that demonstrates the long reach of the new US rule against banks speculating with their own money.

The Financ Volcker rule, which was ratified by US regulators on Tuesday, is aimed at protecting the US financial system. But its ban on proprietary trading reaches many foreign institutions, including RBC’s investment banking arm, known as RBC Capital Markets.

Gordon Nixon, CEO of the bank, said management was weighing its moves ahead of the 2015 Volcker deadline.

'One option of course is to take parts of it and spin it out. You can spin it out and set it up independently', he said. 'You can be invested in that (as a minority shareholder), you (just) can’t have an ownership'.

Hit the link below to access the complete Financial Times article:

Royal Bank of Canada considers spinning off prop trading units (subscriber content)

Credit Suisse to fund software marketplace (subscriber content)

image: © RCabanilla

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