Community | January 22, 2010 | 1 comment

Obama Plan May Cost Banks $13 Billion in Revenue, JPMorgan Says

source: http://www.businessweek.com/news/2010-01-22/obama-plan-may-cost-banks-13-billion-in-revenue-...

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Jan. 22 (Bloomberg) -- President Barack Obama’s plan to curb proprietary trading will cost Goldman Sachs Group Inc., Morgan Stanley, Credit Suisse Group AG, UBS AG and Deutsche Bank AG about $13 billion in revenue next year, according to JPMorgan Chase & Co. analysts.
Of the five banks analyzed, Obama’s proposals will impact Goldman Sachs the most, resulting in an estimated $4.67 billion drop in earnings in 2011, analysts led by London-based Kian Abouhossein said in a note today. UBS stands to lose the least, with revenue declining an estimated $1.92 billion.
“Goldman Sachs is most at risk with its principal investments business at risk and high fixed-income gearing,” the analysts wrote in the note.
Obama proposed yesterday to limit the size of banks and prohibit them from investing in hedge funds and private equity funds as a way to reduce risk-taking and prevent a repeat of the credit crisis.
http://www.businessweek.com/news/2010-01-22/obama-plan-may-cost-banks-13-billion...
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